Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | Oct. 31, 2013 | Feb. 28, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'true | ' | ' |
Amendment Description | ' | ' | ' |
Explanatory Note | |||
This Amendment No. 1 to the Synergy Resources Corporation Annual Report on Form 10-K for the year ended August 31, 2013, reflects changes made in response to comments received from the staff of Securities and Exchange Commission. In response to the comments, we amended our original report to (1) expand our disclosures related to proved undeveloped reserves in the discussion about oil and gas properties in Item 1; (2) expand our disclosure about market risk included in Item 7A; (3) clarified our references to exhibits related to our amended and restated credit agreement and the employment agreements for Ed Holloway and William E. Scaff; (4) filed as an exhibit the underlying drilling contract with Ensign United States Drilling, Inc. that was dated April 19, 2013; (5) in Note 1 to Financial Statements, clarified the description of our policy regarding the ceiling test; and (6) in Note 16 to the Financial Statements expanded our disclosure to provide explanations for the significant changes in reserve quantities. | |||
Except as described above, this amendment does not revise or restate the financial statements or other disclosures included in the original Form 10-K. This amendment does not reflect events occurring after the filing of the original Form 10-K or modify or update disclosures related to subsequent events. Accordingly, this amendment should be read in conjunction with our filings with the SEC subsequent to the filing of the original Form 10-K. | |||
Document Period End Date | 31-Aug-13 | ' | ' |
Entity Registrant Name | 'SYNERGY RESOURCES CORP | ' | ' |
Entity Central Index Key | '0001413507 | ' | ' |
Current Fiscal Year End Date | '--08-31 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 74,391,364 | ' |
Entity Public Float | ' | ' | $309,000 |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Aug. 31, 2013 | Aug. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $19,463 | $19,284 |
Short term investments | 60,018 | ' |
Accounts receivable: | ' | ' |
Oil and gas sales | 7,361 | 3,606 |
Joint interest billing | 4,700 | 3,268 |
Inventory | 194 | 178 |
Other current assets | 239 | 132 |
Total current assets | 91,975 | 26,468 |
Property and equipment: | ' | ' |
Evaluated oil and gas properties, net | 132,979 | 59,936 |
Unevaluated oil and gas properties | 64,715 | 32,484 |
Other property and equipment, net | 271 | 282 |
Property and equipment, net | 197,965 | 92,702 |
Deferred tax asset, net | ' | 332 |
Other assets | 1,296 | 1,230 |
Total assets | 291,236 | 120,732 |
Current liabilities: | ' | ' |
Trade accounts payable | 949 | 1,499 |
Well costs payable | 25,491 | 5,733 |
Revenue payable | 6,081 | 4,160 |
Production taxes payable | 6,277 | 3,805 |
Other accrued expenses | 254 | 395 |
Commodity derivative | 2,315 | ' |
Total current liabilities | 41,367 | 15,592 |
Revolving credit facility | 37,000 | 3,000 |
Commodity derivative | 334 | ' |
Deferred tax liability, net | 6,538 | ' |
Asset retirement obligations | 2,777 | 1,027 |
Total liabilities | 88,016 | 19,619 |
Commitments and contingencies (See Note 14) | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock - $0.01 par value, 10,000,000 shares authorized: no shares issued and outstanding | ' | ' |
Common stock - $0.001 par value, 100,000,000 shares authorized: 70,587,723 and 51,409,340 shares issued and outstanding, respectively | 71 | 52 |
Additional paid-in capital | 216,383 | 123,876 |
Accumulated deficit | -13,234 | -22,815 |
Total shareholders' equity | 203,220 | 101,113 |
Total liabilities and shareholders' equity | $291,236 | $120,732 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 |
BALANCE SHEETS [Abstract] | ' | ' | ' | ' |
Preferred stock, par value per share | $0.01 | $0.01 | $0.01 | ' |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ' |
Preferred stock, shares issued | 0 | 0 | 0 | ' |
Preferred stock, shares outstanding | 0 | 0 | 0 | ' |
Common stock, par value per share | $0.00 | $0.00 | $0.00 | ' |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ' |
Common stock, shares issued | 70,587,723 | 51,409,340 | 36,098,212 | ' |
Common stock, shares outstanding | 70,587,723 | 51,409,340 | 36,098,212 | 13,510,981 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Revenues: | ' | ' | ' |
Oil and gas revenues | $46,223 | $24,969 | $10,002 |
Expenses: | ' | ' | ' |
Lease operating expenses | 3,417 | 1,212 | 484 |
Production taxes | 4,237 | 2,436 | 956 |
Depletion, depreciation and amortization | 13,336 | 6,010 | 2,838 |
General and administrative | 5,688 | 3,557 | 2,904 |
Total expenses | 26,678 | 13,215 | 7,182 |
Operating income | 19,545 | 11,754 | 2,820 |
Other income (expense): | ' | ' | ' |
Change in fair value of derivative conversion liability | ' | ' | -10,229 |
Commodity derivative realized loss | -395 | ' | ' |
Commodity derivative unrealized loss | -2,649 | ' | ' |
Interest expense, net | -97 | ' | -4,247 |
Interest income | 47 | 38 | 56 |
Total other income (expense) | -3,094 | 38 | -14,420 |
Income before income taxes | 16,451 | 11,792 | -11,600 |
Deferred income tax provision (benefit) | 6,870 | -332 | ' |
Net income (loss) | $9,581 | $12,124 | ($11,600) |
Net income (loss) per common share: | ' | ' | ' |
Basic | $0.17 | $0.26 | ($0.45) |
Diluted | $0.16 | $0.25 | ($0.45) |
Weighted average shares outstanding: | ' | ' | ' |
Basic | 57,089,362 | 46,587,558 | 26,009,283 |
Diluted | 59,088,761 | 48,359,905 | 26,009,283 |
STATEMENT_OF_CHANGES_IN_SHAREH
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Earnings (Deficit) [Member] |
In Thousands, except Share data | ||||
Balance at Aug. 31, 2010 | ($1,016) | $14 | $22,309 | ($23,339) |
Balance, shares at Aug. 31, 2010 | 13,510,981 | 13,510,981 | ' | ' |
Shares issued pursuant to conversion of debt and accrued interest | 14,914 | 10 | 14,904 | ' |
Shares issued pursuant to conversion of debt and accrued interest, shares | ' | 9,979,376 | ' | ' |
Reclassification of derivative conversion liability to equity pursuant to early conversion of debt | 19,554 | ' | 19,554 | ' |
Shares issued for Orr Energy acquisition, shares | ' | ' | ' | ' |
Shares issued in exchange for mineral leases and services | 5,670 | 2 | 5,668 | ' |
Shares issued in exchange for mineral leases and services, shares | 1,864,838 | 1,999,838 | ' | ' |
Shares issued in exchange for oil and gas assets, related party | 4,698 | 1 | 4,697 | ' |
Shares issued in exchange for oil and gas assets, related party, shares | 1,864,838 | 1,381,818 | ' | ' |
Shares issued for cash, net of offering costs | 16,691 | 9 | 16,682 | ' |
Shares issued for cash, net of offering costs, shares | 9,000,000 | 9,000,000 | ' | ' |
Shares issued pursuant to conversion of Series D warrants on a cashless basis | ' | ' | ' | ' |
Shares issued pursuant to conversion of Series D warrants on a cashless basis, shares | ' | 226,199 | ' | ' |
Stock based compensation | 197 | ' | 197 | ' |
Stock based compensation, shares | ' | ' | ' | ' |
Net income (loss) | -11,600 | ' | ' | -11,600 |
Balance at Aug. 31, 2011 | 49,108 | 36 | 84,011 | -34,939 |
Balance, shares at Aug. 31, 2011 | 36,098,212 | 36,098,212 | ' | ' |
Reclassification of derivative conversion liability to equity pursuant to early conversion of debt | ' | ' | ' | ' |
Shares issued for Orr Energy acquisition, shares | ' | ' | ' | ' |
Shares issued in exchange for mineral leases and services | 1,999 | 1 | 1,998 | ' |
Shares issued in exchange for mineral leases and services, shares | 669,765 | 669,765 | ' | ' |
Shares issued in exchange for oil and gas assets, related party, shares | 669,765 | ' | ' | ' |
Shares issued for cash, net of offering costs | 37,422 | 15 | 37,407 | ' |
Shares issued for cash, net of offering costs, shares | 14,363,363 | 14,636,363 | ' | ' |
Stock based compensation | 460 | ' | 460 | ' |
Stock based compensation, shares | ' | 5,000 | ' | ' |
Net income (loss) | 12,124 | ' | ' | 12,124 |
Balance at Aug. 31, 2012 | 101,113 | 52 | 123,876 | -22,815 |
Balance, shares at Aug. 31, 2012 | 51,409,340 | 51,409,340 | ' | ' |
Reclassification of derivative conversion liability to equity pursuant to early conversion of debt | ' | ' | ' | ' |
Shares issued for Orr Energy acquistion | 13,518 | 3 | 13,515 | ' |
Shares issued for Orr Energy acquisition, shares | 3,128,422 | 3,128,422 | ' | ' |
Shares issued in exchange for mineral leases and services | 3,166 | 1 | 3,165 | ' |
Shares issued in exchange for mineral leases and services, shares | 3,815,544 | 687,122 | ' | ' |
Shares issued in exchange for oil and gas assets, related party, shares | 687,122 | ' | ' | ' |
Shares issued for cash, net of offering costs | 78,243 | 13 | 78,230 | ' |
Shares issued for cash, net of offering costs, shares | 13,225,000 | 13,225,000 | ' | ' |
Shares issued for exercise of warrants | 3,275 | 1 | 3,274 | ' |
Shares issued for exercise of warrants, shares | ' | 1,052,698 | ' | ' |
Taxes paid on stock option exercise | -6,990 | ' | -6,990 | ' |
Shares issued for exercise of stock option | ' | 1 | -1 | ' |
Shares issued for exercise of stock option, shares | ' | 1,030,057 | ' | ' |
Stock based compensation | 1,314 | ' | 1,314 | ' |
Stock based compensation, shares | ' | 55,084 | ' | ' |
Net income (loss) | 9,581 | ' | ' | 9,581 |
Balance at Aug. 31, 2013 | $203,220 | $71 | $216,383 | ($13,234) |
Balance, shares at Aug. 31, 2013 | 70,587,723 | 70,587,723 | ' | ' |
STATEMENT_OF_CHANGES_IN_SHAREH1
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | |
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract] | ' | ' | ' |
Unamortized discount on shares issued pursuant to conversion of debt and accrued interest | ' | ' | $1,052,917 |
Price per share for shares issued for cash | $6.25 | $2.75 | $2 |
Offering costs | $4,400,000 | $2,028,215 | $1,309,279 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $9,581 | $12,124 | ($11,600) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Depletion, depreciation and amortization | 13,336 | 6,010 | 2,838 |
Amortization of debt issuance costs | ' | ' | 1,588 |
Accretion of debt discount | ' | ' | 2,664 |
Provision for deferred taxes | 6,870 | -332 | ' |
Stock-based compensation | 1,362 | 473 | 627 |
Valuation decrease in commodity derivatives | 2,649 | ' | ' |
Change in fair value of derivative liability | ' | ' | 10,229 |
Accounts receivable | ' | ' | ' |
Oil and gas sales | -3,756 | -1,597 | -991 |
Joint interest billing | -1,432 | -685 | -424 |
Inventory | -16 | 282 | -72 |
Accounts payable | ' | ' | ' |
Trade | -550 | -155 | 1,550 |
Revenue | 1,921 | 4,161 | ' |
Production taxes | 2,472 | 2,279 | 350 |
Accrued expenses | -141 | -1,291 | 1,317 |
Other | -176 | -17 | -160 |
Total adjustments | 22,539 | 9,128 | 19,516 |
Net cash provided by operating activities | 32,120 | 21,252 | 7,916 |
Cash flows from investing activities: | ' | ' | ' |
Acquisition of property and equipment | -80,469 | -46,751 | -30,247 |
Short-term investments | -60,000 | ' | ' |
Net proceeds from sales of oil and gas properties | ' | 71 | 8,382 |
Net cash used in investing activities | -140,469 | -46,680 | -21,865 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from sale of stock | 82,656 | 40,250 | 18,000 |
Offering costs | -4,413 | -2,829 | -1,309 |
Proceeds from exercises of warrants | 3,275 | 3,000 | ' |
Shares withheld for payment of employee payroll taxes | -6,990 | ' | ' |
Net proceeds from revolving credit facility | 34,000 | ' | ' |
Principal repayment of related party notes payable | ' | -5,200 | ' |
Net cash provided by financing activities | 108,528 | 35,221 | 16,691 |
Net increase in cash and equivalents | 179 | 9,793 | 2,742 |
Cash and equivalents at beginning of period | 19,284 | 9,491 | 6,749 |
Cash and equivalents at end of period | $19,463 | $19,284 | $9,491 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Organization and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||
Organization and Summary of Significant Accounting Policies | ' | ||||||||||||
1. | Organization and Summary of Significant Accounting Policies | ||||||||||||
Organization: Synergy Resources Corporation ("the Company") is engaged in oil and gas acquisition, exploration, development and production activities, primarily in the Denver-Julesburg Basin ("D-J Basin") of Colorado. | |||||||||||||
Basis of Presentation: The Company has adopted August 31st as the end of its fiscal year. The Company does not utilize any special purpose entities. | |||||||||||||
At the directive of the Securities and Exchange Commission to use "plain English" in public filings, the Company will use such terms as "we," "our," "us" or "the Company" in place of Synergy Resources Corporation. When such terms are used in this manner throughout this document, they are in reference only to the corporation, Synergy Resources Corporation, and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees. | |||||||||||||
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). | |||||||||||||
Reclassifications: Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported. | |||||||||||||
Use of Estimates: The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, including oil and gas reserves, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary. Actual results could differ from these estimates. | |||||||||||||
Cash and Cash Equivalents: The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of less than three months to be cash and cash equivalents. | |||||||||||||
Short-Term Investments: As part of its cash management strategies, the Company invests in short-term interest bearing deposits such as certificates of deposits with maturities of less than one year. | |||||||||||||
Inventory: Inventories consist primarily of tubular goods and well equipment to be used in future drilling operations or repair operations and are carried at the lower of cost or market | |||||||||||||
Oil and Gas Properties: The Company uses the full cost method of accounting for costs related to its oil and gas properties. Accordingly, all costs associated with acquisition, exploration, and development of oil and gas reserves (including the costs of unsuccessful efforts) are capitalized into a single full cost pool. These costs include land acquisition costs, geological and geophysical expense, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities. Under the full cost method, no gain or loss is recognized upon the sale or abandonment of oil and gas properties unless non-recognition of such gain or loss would significantly alter the relationship between capitalized costs and proved oil and gas reserves. | |||||||||||||
Capitalized costs of oil and gas properties are depleted using the unit-of-production method based upon estimates of proved reserves. For depletion purposes, the volume of petroleum reserves and production is converted into a common unit of measure at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil. Investments in unevaluated properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. | |||||||||||||
Wells in progress represent the costs associated with the drilling of oil and gas wells that have yet to be completed as of August 31, 2013. Since the wells had not been completed as of August 31, 2013, they were classified within unevaluated oil and gas properties and were withheld from the depletion calculation and the ceiling test. The costs for these wells will be transferred into proved property when the wells commence production and will become subject to depletion and the ceiling test calculation in subsequent periods. | |||||||||||||
Under the full cost method of accounting, a ceiling test is performed each quarter. The full cost ceiling test is an impairment test prescribed by SEC regulations. The ceiling test determines a limit on the book value of oil and gas properties. The capitalized costs of proved and unproved oil and gas properties, net of accumulated depreciation, depletion, and amortization, and the related deferred income taxes, may not exceed the estimated future net cash flows from proved oil and gas reserves, less future cash outflows associated with asset retirement obligations that have been accrued, plus the cost of unproved properties not being amortized, plus the lower of cost or estimated fair value of unproven properties being amortized. Prices are held constant for the productive life of each well. Net cash flows are discounted at 10%. If net capitalized costs exceed this limit, the excess is charged to expense and reflected as additional accumulated depreciation, depletion and amortization. The calculation of future net cash flows assumes continuation of current economic conditions. Once impairment expense is recognized, it cannot be reversed in future periods, even if increasing prices raise the ceiling amount. No provision for impairment was required for the twelve months ended August 31, 2013 or 2012. | |||||||||||||
The oil and natural gas prices used to calculate the full cost ceiling limitation are based upon a 12 month rolling average, calculated as the unweighted arithmetic average of the first day of the month price for each month within the 12 month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. Prices are adjusted for basis or location differentials. | |||||||||||||
Oil and Gas Reserves: Oil and gas reserves represent theoretical, estimated quantities of crude oil and natural gas which geological and engineering data estimate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. There are numerous uncertainties inherent in estimating oil and gas reserves and their values, including many factors beyond the Company's control. Accordingly, reserve estimates are different from the future quantities of oil and gas that are ultimately recovered and the corresponding lifting costs associated with the recovery of these reserves. | |||||||||||||
The determination of depletion and amortization expenses, as well as the ceiling test calculation related to the recorded value of the Company's oil and natural gas properties, is highly dependent on estimates of proved oil and natural gas reserves. | |||||||||||||
Capitalized Interest: The Company capitalizes interest on expenditures made in connection with acquisition of mineral interests and development projects that are not subject to current amortization. Interest is capitalized during the period that activities are in progress to bring the projects to their intended use. See Note 9 for additional information. | |||||||||||||
Capitalized Overhead: A portion of the Company's overhead expenses are directly attributable to acquisition and development activities. Under the full cost method of accounting, these expenses in the amounts shown in the table below were capitalized in the full cost pool (in thousands). | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Capitalized overhead | $ | 637 | $ | 345 | $ | 206 | |||||||
Well Costs Payable: The cost of wells in progress are recorded as incurred, generally based upon invoiced amounts or joint interest billings ("JIB"). For those instances in which an invoice or JIB is not received on a timely basis, estimated costs are accrued to oil and gas properties, generally based on the Authorization for Expenditure ("AFE"). | |||||||||||||
Other Property and Equipment: Support equipment (including such items as vehicles, well servicing equipment, and office furniture and equipment) is stated at the lower of cost or market. Depreciation of support equipment is computed using primarily the straight-line method over periods ranging from five to seven years. | |||||||||||||
Asset Retirement Obligations: The Company's activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the asset is permanently removed from service. Calculation of an asset retirement obligation ("ARO") requires estimates about several future events, including the life of the asset, the costs to remove the asset from service, and inflation factors. The ARO is initially estimated based upon discounted cash flows over the life of the asset and is accreted to full value over time using the Company's credit adjusted risk free interest rate. Estimates are periodically reviewed and adjusted to reflect changes. | |||||||||||||
The present value of a liability for the ARO is initially recorded when it is incurred if a reasonable estimate of fair value can be made. This is typically when a well is completed or an asset is placed in service. When the ARO is initially recorded, the Company capitalizes the cost (asset retirement cost or "ARC") by increasing the carrying value of the related asset. ARCs related to wells are capitalized to the full cost pool and subject to depletion. Over time, the liability increases for the change in its present value (accretion of ARO), while the net capitalized cost decreases over the useful life of the asset, as depletion expense is recognized. In addition, ARCs are included in the ceiling test calculation for valuing the full cost pool. | |||||||||||||
Derivative Conversion Liability: The Company accounted for the embedded conversion features in its convertible promissory notes, issued during fiscal year 2010, in accordance with the guidance for derivative instruments, which requires a periodic valuation of their fair value and a corresponding recognition of liabilities associated with such derivatives. The recognition of derivative conversion liabilities related to the issuance of convertible debt was applied first to the proceeds of such issuance as a debt discount at the date of the issuance. All subsequent increases or decreases in the fair value of derivative conversion liabilities were recognized as a charge or credit to other income (expense) in results of operations. In connection with the conversion of convertible promissory notes into shares of the Company's common stock, derivative conversion liabilities were reclassified to additional paid-in-capital. The amounts recognized in the financial statements follow. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
(in thousands) | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Non-cash expense recognized related to the change in | |||||||||||||
the fair value of derivative conversion liabilities | $ | - | $ | - | $ | 10,229 | |||||||
Derivative conversion liabilities recognized in additional | |||||||||||||
paid-in-capital | $ | - | $ | - | $ | 19,554 | |||||||
Debt Issuance Costs: Debt issuance costs incurred in connection with executing convertible promissory notes between December 29, 2009, and March 12, 2011 were classified as a long-term asset. However, as a result of the conversion of all outstanding convertible promissory notes into shares of the Company's common stock, all debt issuance costs were recognized as a component of interest expense through August 31, 2011. | |||||||||||||
Oil and Gas Sales: The Company derives revenue primarily from the sale of crude oil and natural gas produced on its properties. Revenues from production on properties in which the Company shares an economic interest with other owners are recognized on the basis of the Company's pro-rata interest. Revenues are reported on a gross basis for the amounts received before taking into account production taxes and lease operating costs, which are reported as separate expenses. Revenue is recorded and receivables are accrued using the sales method, which occurs in the month production is delivered to the purchaser, at which time ownership of the oil is transferred to the purchaser. Payment is generally received between thirty and ninety days after the date of production. Provided that reasonable estimates can be made, revenue and receivables are accrued to recognize delivery of product to the purchaser. Differences between estimates and actual volumes and prices, if any, are adjusted upon final settlement. | |||||||||||||
Major Customers and Operating Region: The Company operates exclusively within the United States of America. Except for cash and short-term investments, all of the Company's assets are employed in and all of its revenues are derived from the oil and gas industry. The table below presents the percentages of oil and gas revenue resulting from purchases by major customers. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 50% | 68% | 75% | ||||||||||
Company B | 15% | 11% | 21% | ||||||||||
The Company sells production to a small number of customers, as is customary in the industry. Based on the current demand for oil and natural gas, the availability of other buyers, and the Company having the option to sell to other buyers if conditions so warrant, the Company believes that its oil and gas production can be sold in the market in the event that it is not sold to the Company's existing customers. However, in some circumstances, a change in customers may entail significant transition costs and/or shutting in or curtailing production for weeks or even months during the transition to a new customer. | |||||||||||||
Accounts receivable consist primarily of trade receivables from oil and gas sales and amounts due from other working interest owners whom have been billed for their proportionate share of well costs. The Company typically has the right to withhold future revenue disbursements to recover outstanding joint interest billings on outstanding receivables from joint interest owners. | |||||||||||||
Customers with balances greater than 10% of total receivable balances as of each of the fiscal year ends presented are shown in the following table: | |||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 24% | 35% | 31% | ||||||||||
Company B | 23% | 30% | 31% | ||||||||||
Company C | 12% | * | 13% | ||||||||||
* less than 10% | |||||||||||||
Lease Operating Expenses: Costs incurred to operate and maintain wells and related equipment and facilities are expensed as incurred. Lease operating expenses (also referred to as production or lifting costs) include the costs of labor to operate the wells and related equipment and facilities, repairs and maintenance, materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities, property taxes and insurance applicable to proved properties and wells and related equipment and facilities. | |||||||||||||
Stock-Based Compensation: The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date, calculated using the Black-Scholes-Merton option pricing model. The expense is recognized over the vesting period of the grant. See Note 11 below for additional information. | |||||||||||||
Income Tax: Income taxes are computed using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases as well as the effect of net operating losses, tax credits and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. | |||||||||||||
No significant uncertain tax positions were identified as of any date on or before August 31, 2013. The Company's policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As of August 31, 2013, the Company has not recognized any interest or penalties related to uncertain tax benefits. For further information, see Note 12 below. | |||||||||||||
Financial Instruments: The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of less than three months to be cash and cash equivalents. A substantial portion of the Company's financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, trade accounts payable, accrued expenses, and obligations under the revolving line of credit facility, all of which are considered to be representative of their fair value due to the short-term and highly liquid nature of these instruments. | |||||||||||||
Financial instruments, whether measured on a recurring or non-recurring basis, are recorded at fair value. A fair value hierarchy, established by the Financial Accounting Standards Board, prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | |||||||||||||
As discussed in Note 5, the Company incurred asset retirement obligations during the periods presented, the value of which was determined using unobservable pricing inputs (or Level 3 inputs). The Company uses the income valuation technique to estimate the fair value of the obligation using several assumptions and judgments about the ultimate settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement. | |||||||||||||
Commodity Derivative Instruments: The Company has entered into commodity derivative instruments, primarily utilizing swaps or "no premium" collars to reduce the effect of price changes on a portion of our future oil production. The Company's commodity derivative instruments are measured at fair value and are included in the accompanying balance sheets as commodity derivative assets and liabilities. Unrealized gains and losses are recorded based on the changes in the fair values of the derivative instruments. Both the unrealized and realized gains and losses resulting from the contract settlement of derivatives are recorded in the commodity derivative line on the statement of operations. We value our derivative instruments by obtaining independent market quotes, as well as using industry standard models that consider various assumptions, including quoted forward prices for commodities, risk free interest rates, and estimated volatility factors, as well as other relevant economic measures. We compare the valuations calculated by us to valuations provided by the counterparties to assess the reasonableness of each valuation. The discount rate used in the fair values of these instruments includes a measure of nonperformance risk by the counterparty or us, as appropriate. For additional discussion, please refer to Note 7-Commodity Derivative Instruments. | |||||||||||||
Earnings Per Share Amounts: Basic earnings per share includes no dilution and is computed by dividing net income or loss by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. The number of potential shares outstanding relating to stock options and warrants is computed using the treasury stock method. Potentially dilutive securities outstanding are not included in the calculation when such securities would have an anti-dilutive effect on earnings per share. | |||||||||||||
The following table sets forth the share calculation of diluted earnings per share. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Weighted-average shares outstanding - basic | 57,089,362 | 46,587,558 | 26,009,283 | ||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 1,881,682 | 1,380,861 | - | ||||||||||
Warrants | 117,717 | 391,486 | - | ||||||||||
Weighted-average shares outstanding - diluted | 59,088,761 | 48,359,905 | 26,009,283 | ||||||||||
The following potentially dilutive securities outstanding for the fiscal years presented were not included in the respective earnings per share calculation above, as such securities had an anti-dilutive effect on earnings per share: | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 670,000 | 2,495,000 | 4,645,000 | ||||||||||
Warrants | 8,500,000 | 14,098,000 | 14,931,067 | ||||||||||
Total | 9,170,000 | 16,593,000 | 19,576,067 | ||||||||||
Recent Accounting Pronouncements: The Company evaluates the pronouncements of various authoritative accounting organizations to determine the impact of new pronouncements on US GAAP and the impact on the Company. There were various updates recently issued by the Financial Accounting Standards Board, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. | |||||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Property and Equipment [Abstract] | ' | ||||||||||||||||||||
Property and Equipment | ' | ||||||||||||||||||||
2. | Property and Equipment | ||||||||||||||||||||
The capitalized costs related to the Company's oil and gas producing activities were as follows (in thousands): | |||||||||||||||||||||
As of August 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Oil and gas properties, full cost method: | |||||||||||||||||||||
Unevaluated costs, not subject to amortization: | |||||||||||||||||||||
Lease acquisition and other costs | $ | 38,826 | $ | 27,070 | |||||||||||||||||
Wells in progress | 25,889 | 5,414 | |||||||||||||||||||
Subtotal, unevaluated costs | 64,715 | 32,484 | |||||||||||||||||||
Evaluated costs: | |||||||||||||||||||||
Producing and non-producing | 155,755 | 69,667 | |||||||||||||||||||
Total capitalized costs | 220,470 | 102,151 | |||||||||||||||||||
Less, accumulated depletion | (22,776 | ) | (9,731 | ) | |||||||||||||||||
Oil and gas properties, net | 197,694 | 92,420 | |||||||||||||||||||
Other property and equipment | 544 | 436 | |||||||||||||||||||
Less, accumulated depreciation | (273 | ) | (154 | ) | |||||||||||||||||
Other property and equipment, net | 271 | 282 | |||||||||||||||||||
Total property and equipment, net | $ | 197,965 | $ | 92,702 | |||||||||||||||||
Periodically, the Company reviews its unevaluated properties to determine if the carrying value of such assets exceeds estimated fair value. The reviews as of each of the fiscal year ends presented, indicated that estimated fair values of such assets exceeded carrying values, thus revealing no impairment. The full cost ceiling test, explained in Note 1, and, as performed as of each of the fiscal year ends presented, similarly revealed no impairment of oil and gas assets. | |||||||||||||||||||||
Costs Incurred: Costs incurred in oil and gas property acquisition, exploration and development activities for the fiscal years presented were (in thousands): | |||||||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Acquisition of property: | |||||||||||||||||||||
Unproved | $ | 12,295 | $ | 9,145 | $ | 9,198 | |||||||||||||||
Proved | 43,143 | 459 | 21,251 | ||||||||||||||||||
Exploration costs | - | - | - | ||||||||||||||||||
Development costs | 61,128 | 39,739 | 14,997 | ||||||||||||||||||
Asset retirement obligation | 1,578 | 300 | 351 | ||||||||||||||||||
Total costs incurred | $ | 118,144 | $ | 49,643 | $ | 45,797 | |||||||||||||||
Capitalized Costs Excluded from Amortization: The following table summarizes costs related to unevaluated properties that have been excluded from amounts subject to depletion, depreciation, and amortization at August 31, 2013 (in thousands). There were no individually significant properties or significant development projects included in the Company's unevaluated property balance. The Company regularly evaluates these costs to determine whether impairment has occurred. The majority of these costs are expected to be evaluated and included in the amortization base within three years. | |||||||||||||||||||||
Period Incurred | Total as of | ||||||||||||||||||||
August 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | Prior | 2013 | |||||||||||||||||
Unproved leasehold acquisition costs | $ | 11,757 | $ | 9,636 | $ | 16,585 | $ | 848 | $ | 38,826 | |||||||||||
Unevaluated development costs | 25,889 | - | - | - | $ | 25,889 | |||||||||||||||
Total unevaluted costs | $ | 37,646 | $ | 9,636 | $ | 16,585 | $ | 848 | $ | 64,715 | |||||||||||
Acquisition
Acquisition | 12 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Acquisition [Abstract] | ' | ||||||||
Acquisition | ' | ||||||||
3. | Acquisition | ||||||||
On October 23, 2012, the Company entered into a definitive purchase and sale agreement ("the Agreement"), with Orr Energy, LLC ("Orr"), for its interests in 36 producing oil and gas wells and approximately 3,933 gross (3,196 net) mineral acres (the "Orr Assets"). On December 5, 2012, the Company closed the transaction for a combination of cash and stock. Orr received 3,128,422 shares of the Company's common stock valued at $13.5 million and cash consideration of approximately $29.0 million. Transaction costs related to the acquisition were approximately $109,000, all of which were recorded in the statement of operations within the general and administrative expenses line item for the twelve months ended August 31, 2013. No material costs were incurred for the issuance of the shares of common stock. | |||||||||
The acquisition was accounted for using the acquisition method under ASC 805, Business Combinations, which requires the acquired assets and liabilities to be recorded at fair values as of the acquisition date of December 5, 2012. The following table summarizes the purchase price and final allocations of the fair value of the assets acquired and liabilities assumed (in thousands): | |||||||||
Purchase Price | December 5, | ||||||||
2012 | |||||||||
Consideration Given | |||||||||
Cash | $ | 29,012 | |||||||
Synergy Resources Corp. Common Stock * | 13,515 | ||||||||
Total consideration given | $ | 42,527 | |||||||
Allocation of Purchase Price | |||||||||
Proved oil and gas properties | $ | 43,143 | |||||||
Unproved oil and gas properties | 466 | ||||||||
Total fair value of oil and gas properties acquired | 43,609 | ||||||||
Working capital | $ | (842 | ) | ||||||
Asset retirement obligation | (240 | ) | |||||||
Fair value of net assets acquired | $ | 42,527 | |||||||
Working capital acquired was estimated as follows: | |||||||||
Accounts receivable | 521 | ||||||||
Accrued liabilities and expenses | (1,363 | ) | |||||||
Total working capital | $ | (842 | ) | ||||||
* | The fair value of the consideration attributed to the Common Stock under ASC 805 was based on the Company's closing stock price on the measurement date of December 5, 2012. (3,128,422 shares at $4.32 per share) | ||||||||
Pro Forma Financial Information | |||||||||
As stated above, on December 5, 2012, the Company completed an acquisition of oil and gas properties from Orr Energy. Below are the combined results of operations for the twelve months ended August 31, 2013 and 2012 as if the acquisition had occurred on September 1, 2011 (in thousands, except per share data). | |||||||||
The unaudited pro forma results reflect significant pro forma adjustments related to funding the acquisition through the issuance of common stock, additional depreciation expense, costs directly attributable to the acquisition and costs incurred as a result of the Orr Energy acquisition. The pro forma results do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by the Company to integrate the properties acquired. The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been completed as of the beginning of the period, nor are they necessarily indicative of future results. | |||||||||
For the years ended August 31, | |||||||||
(Unaudited) | |||||||||
2013 | 2012 | ||||||||
Oil and Gas Revenues | $ | 47,760 | $ | 32,188 | |||||
Net income | $ | 10,118 | $ | 14,870 | |||||
Earnings per common share | |||||||||
Basic | $ | 0.17 | $ | 0.3 | |||||
Diluted | $ | 0.17 | $ | 0.29 | |||||
Depletion_depreciation_and_amo
Depletion, depreciation and amortization ("DDA") | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Depletion, depreciation and amortization ("DDA") [Abstract] | ' | ||||||||||||
Depletion, depreciation and amortization ("DDA") | ' | ||||||||||||
4. | Depletion, depreciation and amortization ("DDA") | ||||||||||||
Depletion, depreciation and amortization consisted of the following (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Depletion | $ | 13,046 | $ | 5,838 | $ | 2,743 | |||||||
Depreciation and amortization | 290 | 172 | 95 | ||||||||||
Total DDA Expense | $ | 13,336 | $ | 6,010 | $ | 2,838 | |||||||
Capitalized costs of evaluated oil and gas properties are depleted quarterly using the units-of-production method based on a depletion rate, which is calculated by comparing production volumes for the quarter to estimated total reserves at the beginning of the quarter. | |||||||||||||
Asset_Retirement_Obligations
Asset Retirement Obligations | 12 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Asset Retirement Obligations [Abstract] | ' | ||||||||
Asset Retirement Obligations | ' | ||||||||
5. | Asset Retirement Obligations | ||||||||
Upon completion or acquisition of a well, the Company recognizes obligations for its oil and gas operations for anticipated costs to remove and dispose of surface equipment, plug and abandon the wells, and restore the drilling sites to its original use. The estimated present value of such obligations is determined using several assumptions and judgments about the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in regulations. Changes in estimates are reflected in the obligations as they occur. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. For the purpose of determining the fair value of ARO incurred during the fiscal years presented, the Company used the following assumptions: | |||||||||
For the Years Ended August 31, | |||||||||
2013 | 2012 | ||||||||
Inflation rate | 3.9 - 4.0% | 3.9 - 4.0% | |||||||
Estimated asset life | 24.0 - 40.0 years | 24.0 - 27.6 years | |||||||
Credit adjusted risk free interest rate | 8.0 - 11.2% | 11.2 - 11.7% | |||||||
The following table summarizes the changes in asset retirement obligations associated with the Company's oil and gas properties (in thousands). The revisions recognized during 2013 were primarily from increases in the undiscounted abandonment cost estimates. | |||||||||
As of August 31, | |||||||||
2013 | 2012 | ||||||||
Beginning asset retirement obligation | $ | 1,027 | $ | 644 | |||||
Liabilities incurred | 376 | 300 | |||||||
Liabilities assumed | 240 | - | |||||||
Liabilities settled | - | - | |||||||
Accretion expense | 172 | 83 | |||||||
Revisions in previous estimates | 962 | - | |||||||
$ | 2,777 | $ | 1,027 |
Revolving_Credit_Facility
Revolving Credit Facility | 12 Months Ended | |
Aug. 31, 2013 | ||
Revolving Credit Facility [Abstract] | ' | |
Revolving Credit Facility | ' | |
6. | Revolving Credit Facility | |
On November 28, 2012, the Company entered into an amended revolving credit facility ("LOC") with a bank syndicate. The LOC is available for working capital requirements, capital expenditures, acquisitions, general corporate purposes, and to support letters of credit. The terms provide for $150 million in the maximum amount of borrowings available to the Company, subject to a borrowing base limitation. Community Banks of Colorado acts as the administrative agent for the bank syndicate with respect to the LOC. The credit facility expires on November 28, 2016. | ||
Interest under the LOC is payable monthly and accrues at a variable rate, subject to a minimum rate. For each borrowing, the Company designates its choice of reference rates, which can be either the Prime Rate plus a margin of 0% to 1%, or London Interbank Offered Rate (LIBOR) plus a margin of 2.50% to 3.25%. The interest rate margin, as well as other bank fees, varies with utilization of the LOC. The average annual interest rate for borrowings during the year ended August 31, 2013, was 3.2%. As of August 31, 2013, the interest rate on the outstanding balance was 2.7%, representing LIBOR plus a margin of 2.5%. | ||
Certain of the Company's assets, including substantially all developed properties, have been designated as collateral under the arrangement. The borrowing commitment is subject to adjustment based upon a borrowing base calculation that includes the value of oil and gas reserves. The borrowing base limitation is generally subject to redetermination on a semi-annual basis. The most recent redetermination increased the borrowing base to $75 million based upon the reserve report as of February 28, 2013. As of August 31, 2013, the unused borrowing base available for future borrowing totaled approximately $38 million. | ||
The arrangement contains covenants that, among other things, restrict the payment of dividends and require compliance with certain customary financial ratios. On a quarterly basis, the Company must maintain (a) an adjusted current ratio greater than 1.0, (b) a ratio of earnings before interest, taxes, depletion, amortization and exploration expense (EBITDAX) greater than 3.5 times interest and fees, (c) a ratio of total funded debt less than 3.5 times EBITDAX, and (d) a ratio of total funded debt less than 0.5 times total capitalization. Furthermore, terms of the LOC require the Company to maintain hedge contracts covering future production quantities that are included in the borrowing base. The Company is required to hedge no less than 45% and no more than 80% of scheduled production for a rolling 24 months. | ||
Commodity_Derivative_Instrumen
Commodity Derivative Instruments | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Commodity Derivative Instruments [Abstract] | ' | ||||||||||||
Commodity Derivative Instruments | ' | ||||||||||||
7. | Commodity Derivative Instruments | ||||||||||||
The Company has entered into commodity derivative instruments, as described below. The Company has utilized swaps or "no premium" collars to reduce the effect of price changes on a portion of its future oil production. A swap requires a payment to the counterparty if the settlement price exceeds the strike price and the same counterparty is required to make a payment if the settlement price is less than the strike price. A collar requires a payment to the counterparty if the settlement price is above the ceiling price and requires the counterparty to make a payment if the settlement price is below the floor price. The objective of the Company's use of derivative financial instruments is to achieve more predictable cash flows in an environment of volatile oil and gas prices and to manage its exposure to commodity price risk. While the use of these derivative instruments limits the downside risk of adverse price movements, such use may also limit the Company's ability to benefit from favorable price movements. The Company may, from time to time, add incremental derivatives to hedge additional production, restructure existing derivative contracts or enter into new transactions to modify the terms of current contracts in order to realize the current value of the Company's existing positions. The Company does not enter into derivative contracts for speculative purposes. | |||||||||||||
The use of derivatives involves the risk that the counterparties to such instruments will be unable to meet the financial terms of such contracts. The Company's derivative contracts are currently with one counterparty. The Company has netting arrangements with the counterparty that provide for the offset of payables against receivables from separate derivative arrangements with the counterparty in the event of contract termination. The derivative contracts may be terminated by a non-defaulting party in the event of default by one of the parties to the agreement. | |||||||||||||
The Company's commodity derivative instruments are measured at fair value and are included in the accompanying balance sheets as commodity derivative assets and liabilities. Unrealized gains and losses are recorded based on the changes in the fair values of the derivative instruments. Both the unrealized and realized gains and losses resulting from contract settlement of derivatives are recorded in the commodity derivative line on the statements of operations. The Company's valuation estimate takes into consideration the counterparty's credit worthiness, the Company's credit worthiness, and the time value of money. The consideration of the factors results in an estimated exit-price for each derivative asset or liability under a market place participant's view. Management believes that this approach provides a reasonable, non-biased, verifiable, and consistent methodology for valuing commodity derivative instruments. | |||||||||||||
The Company's commodity derivative contracts as of August 31, 2013 are summarized below: | |||||||||||||
Contract Type | Basis (1) | Quantity | Strike Price | Term | |||||||||
(Bbl/month) | ($/Bbl) | ||||||||||||
Collar | NYMEX | 3,014 | $87.00 - $102.50 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Collar | NYMEX | 1,840 | $85.00 - $98.50 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Collar | NYMEX | 7,000 | $80.00 - $92.50 | Jan 1, 2015 - Jun 30, 2015 | |||||||||
Contract Type | Basis (1) | Quantity | Swap Price | Term | |||||||||
(Bbl/month) | ($/Bbl) | ||||||||||||
Swap | NYMEX | 3,014 | $91.70 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Swap | NYMEX | 6,000 | $96.35 | Sept 1, 2013 - Dec 31, 2013 (2) | |||||||||
Swap | NYMEX | 8,000 | $94.45 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Swap | NYMEX | 15,000 | $98.00 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
2013 Total/Average | 32,014 | $95.13 | |||||||||||
Swap | NYMEX | 1,840 | $90.80 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 2,000 | $90.11 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 5,000 | $90.50 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 15,000 | $98.00 | Jan 1, 2014 - Feb 28, 2014 | |||||||||
2014 Total/Average | 23,840 | $92.35 | |||||||||||
(1) NYMEX refers to WTI quoted prices on the New York Mercantile Exchange | |||||||||||||
(2) In connection with entering into these swaps with premium hedged prices, the counterparty has the right, but not the obligation to extend the swap to January 1, 2014 through December 31, 2014 at the current strike price and quantity. This option expires on December 31, 2013. | |||||||||||||
The following table details the fair value of the derivatives recorded in the applicable balance sheet, by category (in thousands): | |||||||||||||
As of August 31, | |||||||||||||
Underlying Commodity | Balance Sheet Location | 2013 | 2012 | ||||||||||
Crude Oil derivative contract | Current liabilities | $ | 2,315 | $ | - | ||||||||
Crude Oil derivative contract | Noncurrent liabilities | $ | 334 | $ | - | ||||||||
The amount of loss recognized in the statements of operations related to derivative financial instruments was as follows (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Unrealized loss on commodity derivatives | $ | 2,649 | $ | - | $ | - | |||||||
Realized loss on commodity derivatives | 395 | - | - | ||||||||||
Total loss | $ | 3,044 | $ | - | $ | - |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
8. | Fair Value Measurements | ||||||||||||||||
ASC Topic 820, Fair Value Measurements and Disclosure, establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: | |||||||||||||||||
· | Level 1: Quoted prices are available in active markets for identical assets or liabilities; | ||||||||||||||||
· | Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; | ||||||||||||||||
· | Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models. | ||||||||||||||||
The financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. There were no significant assets or liabilities that were measured at fair value on a non-recurring basis during the reporting periods after initial recognition. | |||||||||||||||||
The Company's non-recurring fair value measurements include asset retirement obligations, please refer to Note 5-Asset Retirement Obligations, and for the purchase price allocations for the fair value of assets and liabilities acquired through business combinations, please refer to Note 3-Acquisitions. | |||||||||||||||||
The Company determines the estimated fair value of its asset retirement obligations by calculating the present value of estimated cash flows related to plugging and abandonment liabilities using level 3 inputs. The significant inputs used to calculate such liabilities include estimates of costs to be incurred; the Company's credit adjusted discount rates, inflation rates and estimated dates of abandonment. The asset retirement liability is accreted to its present value each period and the capitalized asset retirement cost is depleted as a component of the full cost pool using the units-of-production method. | |||||||||||||||||
The acquisition of a group of assets in a business combination transaction requires fair value estimates for assets acquired and liabilities assumed. The fair value of assets and liabilities acquired through business combinations is calculated using a discounted-cash flow approach using level 3 inputs. Cash flow estimates require forecasts and assumptions for many years into the future for a variety of factors, including risk-adjusted oil and gas reserves, commodity prices and operating costs. | |||||||||||||||||
The following table presents the Company's financial assets and liabilities that were accounted for at fair value on a recuring basis as of August 31, 2013 and 2012 by level within the fair value hierarchy (in thousands): | |||||||||||||||||
Fair Value Measurements at August 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets and liabilities: | |||||||||||||||||
Commodity derivative asset | $ | - | $ | - | $ | - | $ | - | |||||||||
Commodity derivative liability | $ | - | $ | 2,649 | $ | - | $ | 2,649 | |||||||||
Fair Value Measurements at August 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets and liabilities: | |||||||||||||||||
Commodity derivative asset | $ | - | $ | - | $ | - | $ | - | |||||||||
Commodity derivative liability | $ | - | $ | - | $ | - | $ | - | |||||||||
Commodity Derivative Instruments | |||||||||||||||||
The Company determines its estimate of the fair value of derivative instruments using a market approach based on several factors, including quoted market prices in active markets, quotes from third parties, the credit rating of each counterparty, and the Company's own credit rating. In consideration of counterparty credit risk, the Company assessed the possibility of whether the counterparty to the derivative would default by failing to make any contractually required payments. Additionally, the Company considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions. At August 31, 2013, derivative instruments utilized by the Company consist of both "no premium" collars and swaps. The crude oil derivative markets are highly active. Although the Company's derivative instruments are valued using public indices, the instruments themselves are traded with third-party counterparties and are not openly traded on an exchange. As such, the Company has classified these instruments as level 2. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, commodity derivative instruments (discussed above) and credit facility borrowings. The carrying values of cash and cash equivalents and accounts receivable, accounts payable are representative of their fair values due to their short-term maturities. The carrying amount of the Company's credit facility approximated fair value as it bears interest at variable rates over the term of the loan. | |||||||||||||||||
Interest_Expense
Interest Expense | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Interest Expense [Abstract] | ' | ||||||||||||
Interest Expense | ' | ||||||||||||
9. | Interest Expense | ||||||||||||
The components of interest expense are (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revolving bank credit facility at a variable rate | $ | 1,067 | $ | 108 | $ | 41 | |||||||
Convertible promissory notes at 8% | - | - | 590 | ||||||||||
Related party note payable at 5.25% | - | 68 | 74 | ||||||||||
Accretion of debt discount | - | - | 2,664 | ||||||||||
Amortization of debt issuance costs | 160 | 32 | 1,588 | ||||||||||
Less, interest capitalized | (1,130 | ) | (208 | ) | (710 | ) | |||||||
Interest expense, net | $ | 97 | $ | - | $ | 4,247 |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Shareholders' Equity [Abstract] | ' | ||||||||||||||||
Shareholders' Equity | ' | ||||||||||||||||
10. | Shareholders' Equity | ||||||||||||||||
The Company's classes of stock are summarized as follows: | |||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Preferred stock, par value | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||||
Preferred stock, shares issued and outstanding | nil | nil | nil | ||||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||||||
Common stock, par value | $ | 0.001 | $ | 0.001 | $ | 0.001 | |||||||||||
Common stock, shares issued and outstanding | 70,587,723 | 51,409,340 | 36,098,212 | ||||||||||||||
Preferred Stock may be issued in series with such rights and preferences as may be determined by the Board of Directors. Since inception, the Company has not issued any preferred shares. | |||||||||||||||||
The following shares of common stock were issued during the fiscal years presented: | |||||||||||||||||
Sale of common stock | |||||||||||||||||
In June 2013, the Company completed the sale of common stock in an underwritten public offering led by Johnson Rice LLC. | |||||||||||||||||
In fiscal year 2012, the Company completed the sale of common stock in an underwritten public offering led by Northland Capital Markets. | |||||||||||||||||
In fiscal year 2011, the Company completed the sale of common stock to private investors. | |||||||||||||||||
Certain details of each transaction are shown in the following table. Net proceeds represent amounts received by the Company after deductions for underwriting discounts, commissions and expenses of the offering. | |||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of common shares sold | 13,225,000 | 14,363,363 | 9,000,000 | ||||||||||||||
Offering price per common share | $ | 6.25 | $ | 2.75 | $ | 2 | |||||||||||
Net proceeds (in thousands) | $ | 78,243 | $ | 37,422 | $ | 16,691 | |||||||||||
Common stock issued for acquisition of mineral interests and services | |||||||||||||||||
During the fiscal years presented, the Company issued common shares in exchange for mineral property interests and to individuals as compensation for services provided to the Company. The value of each transaction was determined using the market price of the Company's common stock on the date of each transaction. | |||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of common shares issued for mineral property leases | 687,122 | 669,765 | 1,864,838 | ||||||||||||||
Number of common shares issued for Orr Energy acquisition | 3,128,422 | - | - | ||||||||||||||
Total common shares issued | 3,815,544 | 669,765 | 1,864,838 | ||||||||||||||
Average price per common share | $ | 4.37 | $ | 3.12 | $ | 3.04 | |||||||||||
Aggregate value of shares issues (in thousands) | 16,684 | $ | 2,090 | $ | 5,670 | ||||||||||||
Common stock warrants | |||||||||||||||||
The Company has issued warrants to purchase common stock. The relevant terms of the warrants are described in the following paragraphs. | |||||||||||||||||
Series A - During the year ended August 31, 2009, the Company issued 4,098,000 Series A warrants, each of which was immediately exercisable. Each Series A warrant entitled the holder to purchase one share of common stock for $6.00 per share. All of the Series A warrants expired on December 31, 2012. | |||||||||||||||||
Series B - During the year ended August 31, 2009, the Company issued 1,000,000 Series B warrants, each of which was immediately exercisable. Each Series B warrant entitled the holder to purchase one share of common stock for $10.00 per share. All of the Series B warrants expired on December 31, 2012. | |||||||||||||||||
Series C - During the year ended August 31, 2010, the Company issued 9,000,000 Series C warrants in connection with a unit offering. Each unit included one convertible promissory note with a face value of $100,000 and 50,000 Series C warrants. Each Series C warrant entitles the holder to purchase one share of common stock for $6.00 per share. The Series C warrants will expire, if not previously exercised, on December 31, 2014. During the year ended August 31, 2013, 500,000 warrants were exercised. | |||||||||||||||||
Series D - During the year ended August 31, 2010, the Company issued 1,125,000 Series D warrants to the placement agent for a unit offering. Each Series D warrant entitles the holder to purchase one share of common stock for $1.60 per share, and contains a net settlement provision that provides for exercise of the warrants on a cashless basis. The Series D warrants will expire, if not previously exercised, on December 31, 2014. During each of the three years ended August 31, 2013, the following warrants were exercised: 627,799 during fiscal 2013, nil during fiscal 2012, and 355,399 during fiscal 2011. | |||||||||||||||||
Sales Agent Warrants - During the year ended August 31, 2009, the Company issued 31,733 warrants to the sales agent for an equity offering. Each Sales Agent Warrant entitled the holder to purchase two shares of common for $1.80 per share. The Sales Agent Warrants had an expiration date of December 31, 2012, and all of the warrants were exercised during the year ended August 31, 2013. | |||||||||||||||||
Investor Relations Warrants - During the year ended August 31, 2012, the Company issued 100,000 warrants to a firm providing investor relations services. Each Investor Relations Warrant entitles the holder to purchase one share of common stock for $2.69 per share, and contains a net settlement provision that provides for exercise of the warrants on a cashless basis. The warrants were to become exercisable in equal quarterly installments over a one year period. During the year ended August 31, 2013, warrants to purchase 50,000 shares became exercisable and warrants to purchase 50,000 shares were forfeited due to early termination of the agreement. Also during the year ended August 31, 2013, 25,000 warrants were exercised. | |||||||||||||||||
The following table summarizes activity for common stock warrants for the fiscal years presented: | |||||||||||||||||
Number of Shares Issuable Upon Warrant Exercise | Weighted Average Exercise Price Per Share | ||||||||||||||||
Outstanding, August 31, 2010 | 15,286,466 | $ | 5.92 | ||||||||||||||
Exercised | 355,399 | $ | 1.6 | ||||||||||||||
Outstanding, August 31, 2011 | 14,931,067 | $ | 6.02 | ||||||||||||||
Granted | 100,000 | $ | 2.69 | ||||||||||||||
Exercised | - | $ | - | ||||||||||||||
Outstanding, August 31, 2012 | 15,031,067 | $ | 6.02 | ||||||||||||||
Exercised | 1,216,265 | $ | 3.44 | ||||||||||||||
Forfeited / Expired | 5,148,000 | $ | 6.74 | ||||||||||||||
Outstanding, August 31, 2013 | 8,666,802 | $ | 5.92 | ||||||||||||||
The following table summarizes information about the Company's issued and outstanding common stock warrants as of August 31, 2013: | |||||||||||||||||
Description | Number of | Exercise | Remaining | Exercise Price | |||||||||||||
Shares | Price | Contractual | times number | ||||||||||||||
Life | of shares | ||||||||||||||||
(in years) | |||||||||||||||||
Series C | 8,500,000 | $ | 6 | 1.3 | $ | 51,000,000 | |||||||||||
Series D | 141,802 | $ | 1.6 | 1.3 | $ | 226,883 | |||||||||||
Investor Relations | 25,000 | $ | 2.69 | 2.3 | $ | 67,250 | |||||||||||
Total | 8,666,802 | $ | 51,294,133 | ||||||||||||||
Conversion of Promissory Notes into Shares of Common Stock | |||||||||||||||||
During the year ended August 31, 2011, convertible promissory notes with a face value of $15,908,000 were converted into 9,942,500 shares of common stock at a rate of $1.60 per share. In addition, 36,876 shares of common stock were issued in payment of accrued interest, also at a rate of $1.60 per share. | |||||||||||||||||
The notes had been issued during the fiscal year ended August 31, 2010, as part of the Company's sale of 180 units, each of which consisted of a convertible promissory note in the face amount of $100,000 and bearing interest at an annual rate of 8%. Some of the notes were converted into common shares during the year ended August 31, 2010, and all of the remaining outstanding notes were converted during the year ended August 31, 2011. | |||||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||||
Stock-Based Compensation | ' | ||||||||||||
11. | Stock-Based Compensation | ||||||||||||
In addition to cash compensation, the Company may compensate certain service providers, including employees, directors, consultants, and other advisors, with equity based compensation in the form of stock options, restricted stock grants, and warrants. The Company records an expense related to equity compensation by pro-rating the estimated fair value of each grant over the period of time that the recipient is required to provide services to the Company (the "vesting phase"). The calculation of fair value is based, either directly or indirectly, on the quoted market value of the Company's common stock. Indirect valuations are calculated using the Black-Scholes-Merton option pricing model. For the periods presented, all stock based compensation expense was classified as a component within General and Administrative expense on the Statement of Operations. | |||||||||||||
The amount of stock based compensation expense is as follows (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Stock options | $ | 1,039 | $ | 443 | $ | 197 | |||||||
Restricted stock grants | 277 | 17 | 430 | ||||||||||
Investor relations warrants | 46 | 13 | - | ||||||||||
$ | 1,362 | $ | 473 | $ | 627 | ||||||||
General Description of Stock Option and Other Stock Award Plans | |||||||||||||
The Company has three stock award plans: (i) a 2011 non-qualified stock option plan, (ii) a 2011 incentive stock option plan, and (iii) a 2011 stock bonus plan. The plans adopted during 2011 replaced a non-qualified stock option plan and a stock bonus plan originally adopted during 2005 (the "2005 Plans"). No additional options or shares will be issued under the 2005 Plans. | |||||||||||||
Each plan authorizes the issuance of shares of the Company's common stock to persons that exercise options granted pursuant to the Plan. Employees, directors, officers, consultants and advisors are eligible to receive such awards, provided that bona fide services be rendered by such consultants or advisors and such services must not be in connection with promoting our stock or the sale of securities in a capital-raising transaction. The option exercise price is determined by the Board of Directors, though is generally the closing market price of Company stock on the date of grant. | |||||||||||||
As of August 31, 2013, there were 5,000,000 shares authorized for issuance under the non-qualified plan and 2,000,000 shares authorized for each of the incentive stock option and stock bonus plans. | |||||||||||||
During the respective fiscal years, the Company granted the following non-qualified stock options: | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Number of options to purchase common shares | 1,025,000 | 275,000 | 425,000 | ||||||||||
Weighted average exercise price | $ | 6.05 | $ | 2.96 | $ | 3.79 | |||||||
Term (in years) | 10 years | 10 years | 10 years | ||||||||||
Vesting Period (in years) | 3-5 years | 4-5 years | 4-5 years | ||||||||||
Fair Value (in thousands) | $ | 4,179 | $ | 519 | $ | 990 | |||||||
The assumptions used in valuing stock options granted during each of the fiscal years presented were as follows: | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected term | 6.2 years | 6.5 years | 6.0 - 6.5 years | ||||||||||
Expected volatility | 77 | % | 56.7 - 69.4 | % | 53.2 - 69.4 | % | |||||||
Risk free rate | 0.89-2.11 | % | 1.01-1.42 | % | 1.48-2.63 | % | |||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Forfeiture rate | 0 | % | 0.0 - 0.7 | % | 0 | % | |||||||
During the year end August 31, 2013, the Compensation Committee modified the terms of the stock options to acquire 2,000,000 shares of common stock with an original expiration date of June 2013 to August 2013. The effect of the modification resulted in an immaterial expense to stock based compensation. Effective August 27, 2013, the options were exercised on a cashless basis. As part of the net settlement provisions of a cashless exercise, the Company withheld 1,026,043 shares with a value of $8.7 million, which was used to satisfy payment of the exercise price and $6.7 million to pay to the appropriate government entity to satisfy the required minimum payroll taxes. | |||||||||||||
The following table summarizes activity for stock options for the fiscal years presented: | |||||||||||||
Number of | Weighted | ||||||||||||
Shares | Average | ||||||||||||
Exercise Price | |||||||||||||
Outstanding, August 31, 2010 | 4,220,000 | $ | 5.36 | ||||||||||
Granted | 425,000 | $ | 3.79 | ||||||||||
Exercised | - | $ | - | ||||||||||
Outstanding, August 31, 2011 | 4,645,000 | $ | 5.21 | ||||||||||
Granted | 275,000 | $ | 2.96 | ||||||||||
Exercised | - | $ | - | ||||||||||
Forfeited | (5,000 | ) | $ | 3.4 | |||||||||
Outstanding, August 31, 2012 | 4,915,000 | $ | 5.09 | ||||||||||
Granted | 1,025,000 | $ | 6.05 | ||||||||||
Exercised | (2,120,000 | ) | $ | 1.1 | |||||||||
Expired | (2,000,000 | ) | $ | 10 | |||||||||
Outstanding, August 31, 2013 | 1,820,000 | $ | 4.88 | ||||||||||
The following table summarizes information about issued and outstanding stock options as of August 31, 2013: | |||||||||||||
Outstanding | Vested | ||||||||||||
Options | Options | ||||||||||||
Number of shares | 1,820,000 | 373,000 | |||||||||||
Weighted average remaining contractual life | 8.7 years | 7.7 years | |||||||||||
Weighted average exercise price | $ | 4.88 | $ | 3.71 | |||||||||
Aggregate intrinsic value (in thousands) | $ | 8,160 | $ | 2,107 | |||||||||
The estimated unrecognized compensation cost from unvested stock options as of August 31, 2013, w hich will be recognized ratably over the remaining vesting phase, is as follows: | |||||||||||||
Unvested Options | |||||||||||||
at August 31, 213 | |||||||||||||
Unrecognized compensation expense (in thousands) | $ | 4,452 | |||||||||||
Remaining vesting phase | 3.4 years | ||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
12. | Income Taxes | ||||||||||||
The income tax provision (benefit) is comprised of the following (in thousands): | |||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | - | $ | - | $ | - | |||||||
State | - | - | - | ||||||||||
Total current income tax | - | - | - | ||||||||||
Deferred: | |||||||||||||
Federal | $ | 6,367 | $ | 4,219 | $ | 4,266 | |||||||
State | 503 | 360 | 354 | ||||||||||
Total deferred income tax | 6,870 | 4,579 | 4,620 | ||||||||||
Valuation allowance | - | (4,911 | ) | (4,620 | ) | ||||||||
Income tax provision (benefit) | $ | 6,870 | $ | (332 | ) | $ | - | ||||||
A reconciliation of expected federal income taxes on income from continuing operations at statutory rates with the expense (benefit) for income taxes is follows (in thousands): | |||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Federal income tax at statutory rate | $ | 5,594 | $ | 4,009 | $ | 3,944 | |||||||
State income taxes, net of federal tax | 503 | 360 | 354 | ||||||||||
Statutory depletion | (929 | ) | - | - | |||||||||
Stock based compensation | 1,911 | - | - | ||||||||||
Other | (209 | ) | 210 | 322 | |||||||||
Change in valuation allowance | - | (4,911 | ) | (4,620 | ) | ||||||||
Income tax provision (benefit) | $ | 6,870 | $ | (332 | ) | $ | - | ||||||
Effective rate expressed as a percentage | 42 | % | 3 | % | 0 | % | |||||||
The Company reported a change in valuation allowance of $4,911,000 for the year ended August 31, 2012. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment, and judgment is required in considering the relative weight of negative and positive evidence. The Company continues to monitor facts and circumstances in the reassessment of the likelihood that operating loss carry-forwards, credits and other deferred tax assets will be utilized prior to their expiration. As a result, it may be determined that a deferred tax asset valuation allowance should be established or released. Any increases or decreases in a deferred tax asset valuation allowance would impact net income through offsetting changes in income tax expense. In 2012, the Company determined that the weight of the evidence indicated that it would more likely than not be able to realize its deferred tax asset, and the entire valuation allowance was released. | |||||||||||||
The tax effects of temporary differences that give rise to significant components of the deferred tax assets and deferred tax liabilities at each of the fiscal year ends presented follow (in thousands): | |||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carry-forward | $ | 11,485 | $ | 12,643 | |||||||||
Stock-based compensation | 515 | 4,070 | |||||||||||
Statutory depletion | 929 | - | |||||||||||
Unrealized loss on commodity derivative | 982 | - | |||||||||||
Other | 3 | 3 | |||||||||||
Gross deferred tax assets | $ | 13,914 | $ | 16,716 | |||||||||
Deferred tax liabilities: | |||||||||||||
Basis of oil and gas properties | 20,452 | 16,384 | |||||||||||
Gross deferred tax liabilities | 20,452 | 16,384 | |||||||||||
Deferred tax liability (asset), net | $ | 6,538 | $ | (332 | ) | ||||||||
At August 31, 2013 the Company has a net operating loss carry-forward for federal and state tax purposes of approximately $41.3 million that could be utilized to offset taxable income of future years. For financial reporting purposes the company has net operating losses of approximately $31 million. The difference of $10.3 million relates to tax deductions for compensation expense for financial reporting purposes for which the benefit will not be recognized until the related deductions reduce taxes payable. The net operating loss carryovers may be carried back two years and forward twenty years from the year the net operating loss was generated. Substantially all of the carry-forward will commence expiring in 2031, 2032, and 2033. | |||||||||||||
The realization of the deferred tax assets related to the NOL carry-forwards is dependent on the Company's ability to generate sufficient future taxable income within the applicable carryforward periods. As of August 31, 2013, the Company believes it will be able to generate sufficient future taxable income within the carryforward periods, and accordingly believes that it is more likely than not that its net deferred income tax assets will be fully realized. | |||||||||||||
The ability of the Company to utilize its NOL carry-forwards to reduce future taxable income is subject to various limitations under the Internal Revenue Code of 1986, as amended (the "Code"). The utilization of such carry-forwards may be limited upon the occurrence of certain ownership changes, including the purchase or sale of stock by 5% shareholders and the offering of stock by the Company during any three-year period resulting in an aggregate change of more than 50% in the beneficial ownership of the Company. In the event of an ownership change, Section 382 of the Code imposes an annual limitation on the amount of a Company's taxable income that can be offset by these carry-forwards. The Company completed a study of the impact of the Code Section 382 limitation on future payments and determined that the statutory provisions were unlikely to limit the Company's ability to realize future tax benefits. | |||||||||||||
As of August 31, 2013, the Company had no unrecognized tax benefits. The Company believes that there are no new items, nor changes in facts or judgments that should impact the Company's tax position. Given the substantial NOL carry-forwards at both the federal and state levels, it is anticipated that any changes resulting from a tax examination would simply adjust the carry-forwards, and would not result in significant interest expense or penalties. Substantially of the Company's tax returns filed since inception are still subject to examination by tax authorities. | |||||||||||||
Related_Party_Transactions_and
Related Party Transactions and Commitments | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Related Party Transactions and Commitments [Abstract] | ' | ||||||||||||
Related Party Transactions and Commitments | ' | ||||||||||||
13. | Related Party Transactions and Commitments | ||||||||||||
Two of the Company's executive officers control three entities that have entered into agreements to provide various goods, services, facilities, and oil and gas properties to the Company. The entities are Petroleum Management, LLC ("PM"), Petroleum Exploration and Management, LLC ("PEM"), and HS Land & Cattle, LLC ("HSLC"). | |||||||||||||
Acquisition of Oil and Gas Assets from PEM: During the year ended August 31, 2011, the Company completed two transactions under which it acquired oil and gas assets from PEM, as outlined below. | |||||||||||||
In May 2011, PEM sold all of its operating oil and gas assets (excluding passive assets such as royalty interests) to the Company. Pursuant to the terms of the Purchase and Sale Agreement, as approved by its shareholders, the Company acquired a working interest in operating oil and gas wells and certain other mineral assets in a transaction that closed on May 24, 2011. The purchase price consisted of a combination of cash, 1,381,818 shares of restricted common stock, and a note payable, as detailed in the table below (in thousands) In November 2011, the Company utilized proceeds from the LOC (Note 6) to repay the entire principal balance and accrued interest. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Consideration for certain mineral assets: | |||||||||||||
Cash payments for certain mineral assets | $ | - | $ | - | $ | 10,000 | |||||||
Value of restricted shares of common stock | - | - | 4,698 | ||||||||||
Promissory note | - | - | 5,200 | ||||||||||
Total | $ | - | $ | - | $ | 19,898 | |||||||
Subsequent settlement of amounts owing: | |||||||||||||
Repayment of promissory note | $ | - | $ | 5,200 | $ | - | |||||||
Payment of interest on promissory note | - | 142 | - | ||||||||||
Total | $ | - | $ | 5,342 | $ | - | |||||||
In a separate transaction that closed in October 2010, the Company acquired with cash certain mineral assets located in the Wattenberg Field of the D-J Basin, from PM and PEM. The assets acquired included working interests in certain operating oil and gas wells, drill sites, and miscellaneous equipment for a purchase price of $1,017,435. | |||||||||||||
Other Related Party Transactions: In addition to the transactions described above, the Company undertook various activities with PM and PEM that are related to the development and operation of oil and gas properties. The Company occasionally purchased services and certain oil and gas equipment, such as tubular goods and surface equipment, from PM. The Company reimbursed PM for the original cost of such services and equipment. Prior to the asset acquisition transaction that closed on May 24, 2011, PEM was a joint working interest owner of certain wells operated by the Company. PEM was charged for its pro-rata share of costs and expenses incurred on its behalf by the Company, and similarly, PEM was credited for its pro-rata share of revenues collected on its behalf. Effective with the closing of the asset acquisition, the related party transactions of this nature have ceased. | |||||||||||||
The following table summarizes the transactions with PM and PEM during the fiscal years presented (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning balance due to PM | $ | - | $ | - | $ | 539 | |||||||
Purchase of equipment from PM | - | - | 2 | ||||||||||
Payments to PM for equipment | - | - | (541 | ) | |||||||||
Ending balance due to PM for equipment | $ | - | $ | - | $ | - | |||||||
Beginning balance due from PEM | $ | - | $ | - | $ | 868 | |||||||
Joint interest costs billed to PEM | - | - | 396 | ||||||||||
Amounts collected from PEM | - | - | (1,264 | ) | |||||||||
Ending balance due from PEM | $ | - | $ | - | $ | - | |||||||
Facilities and Services Agreements: The Company leases office space and an equipment storage yard in Platteville, Colorado, under a twelve month lease agreement with HSLC. The lease is renewable annually. Under this agreement, the Company incurred the following expenses to HSLC for the fiscal years presented (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Rent expense | $ | 130 | $ | 120 | $ | 120 | |||||||
During 2010, the Company initiated a program to acquire mineral interests in several Colorado and Nebraska counties that are considered the eastern portion of the D-J Basin. George Seward, a member of the Company's board of directors, agreed to lead that program. The Company agreed to compensate the persons, including Mr. Seward, to assist the Company with the acquisitions at a specific rate per qualifying net mineral acre. The compensation is paid in the form of restricted shares of the Company's common stock, as follows: | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Restricted shares of common stock | - | 188,137 | 40,000 | ||||||||||
Value of restriced shares of common stock (in thousands) | $ | - | $ | 491 | $ | 164 | |||||||
Effective January 1, 2012, the Company commenced processing its own oil and gas revenues. Payments to royalty owners included payments to entities controlled by three of the Company's directors, Ed Holloway, William Scaff Jr, and George Seward. The following table summarizes the royalty payments made to directors or their affiliates for the fiscal years presented (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total Royalty Payments | $ | 304 | $ | 196 | N/A | ||||||||
Other_Commitments_and_Continge
Other Commitments and Contingencies | 12 Months Ended | |
Aug. 31, 2013 | ||
Other Commitments and Contingencies [Abstract] | ' | |
Other Commitments and Contingencies | ' | |
14. | Other Commitments and Contingencies | |
Effective July 18, 2013, the Company amended its drilling contract with Ensign United States Drilling, Inc. to utilize a drilling rig for the drilling of 25 horizontal wells. Total payments due to Ensign will depend upon a number of variables, including the target formation and other technical details. The Company estimates that this commitment will result in its use of the rig until June 2014, and that total drilling costs will approximate $25.6 million. As of August 31, 2013, the Company had accrued costs of $5.7 million and estimates that its remaining obligations under this contract approximate $19.9 million. | ||
From time to time, the Company receives notice from other operators of their intent to drill and operate a well in which the Company will own a working interest (a "non-operated well"). The Company has the option to participate in the well and assume the obligation for its pro-rata share of the costs. As of September 30, 2013, the Company had agreed to participate in 13 new horizontal wells, with aggregate costs to its interest estimated at $5.2 million. It is the Company's policy to accrue costs on a non-operated well when it receives notice that active drilling operations have commenced. For these 13 wells, no costs were accrued at August 31, 2013, as active drilling operations had not begun. In addition, the Company had been notified by other operators that it may have an interest in 54 potential wells. As of September 30, 2013, the Company had not yet committed to participate in the future wells and had not determined its potential working interest or cost obligation. |
Supplemental_Schedule_of_Infor
Supplemental Schedule of Information to the Statements of Cash Flows | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Supplemental Schedule of Information to the Statements of Cash Flows [Abstract] | ' | ||||||||||||
Supplemental Schedule of Information to the Statements of Cash Flows | ' | ||||||||||||
15. | Supplemental Schedule of Information to the Statements of Cash Flows | ||||||||||||
The following table supplements the cash flow information presented in the financial statements for the fiscal years presented (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
Supplemental cash flow information: | 2013 | 2012 | 2011 | ||||||||||
Interest paid | $ | 995 | $ | 74 | $ | 788 | |||||||
Income taxes paid | - | - | - | ||||||||||
Non-cash investing and financing activities: | |||||||||||||
Accrued well costs | $ | 25,491 | $ | 5,733 | $ | 4,967 | |||||||
Assets acquired in exchange for common stock | 16,684 | 1,985 | 9,938 | ||||||||||
Assets acquired in exchange for note payable | - | - | 5,200 | ||||||||||
Asset retirement costs and obligations | 1,578 | 300 | 351 | ||||||||||
Conversion of promissory notes into common stock | - | - | 15,908 | ||||||||||
Unaudited_Oil_and_Gas_Reserves
Unaudited Oil and Gas Reserves Information | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Unaudited Oil and Gas Reserves Information [Abstract] | ' | ||||||||||||
Unaudited Oil and Gas Reserves Information | ' | ||||||||||||
16. | Unaudited Oil and Gas Reserves Information | ||||||||||||
Oil and Natural Gas Reserve Information: Proved reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions (prices and costs held constant as of the date the estimate is made). Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. | |||||||||||||
Proved oil and natural gas reserve information as of the fiscal year ends presented, and the related discounted future net cash flows before income taxes are based on estimates prepared by Ryder Scott Company LP. Reserve information for the properties was prepared in accordance with guidelines established by the SEC. | |||||||||||||
The reserve estimates prepared as of each of the fiscal year ends presented were prepared in accordance with "Modernization of Oil and Gas Reporting" published by the SEC. The recent guidance included updated definitions of proved developed and proved undeveloped oil and gas reserves, oil and gas producing activities and other terms. Proved oil and gas reserves were calculated based on the prices for oil and gas during the 12 month period before the respective reporting date, determined as the unweighted arithmetic average of the first day of the month price for each month within such period, rather than the year-end spot prices, which had been used in prior years. This average price is also used in calculating the aggregate amount and changes in future cash inflows related to the standardized measure of discounted future cash flows. Undrilled locations can be classified as having proved undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years. The recent guidance broadened the types of technologies that may be used to establish reserve estimates. | |||||||||||||
The following table sets forth information regarding the Company's net ownership interests in estimated quantities of proved developed and undeveloped oil and gas reserve quantities and changes therein for each of the fiscal years presented: | |||||||||||||
Oil (Bbl) | Gas (McF) | Boe | |||||||||||
Balance, August 31, 2010 | 676,685 | 4,481,051 | 1,423,527 | ||||||||||
Revision of previous estimates | 323,704 | 611,516 | 425,623 | ||||||||||
Purchase of reserves in place | 967,302 | 8,466,714 | 2,378,421 | ||||||||||
Extensions, discoveries, and other additions | 191,931 | 1,152,708 | 384,049 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (89,917 | ) | (450,831 | ) | (165,056 | ) | |||||||
Balance, August 31, 2011 | 2,069,705 | 14,261,158 | 4,446,564 | ||||||||||
Revision of previous estimates | 429,783 | 3,298,906 | 979,601 | ||||||||||
Purchase of reserves in place | 33,328 | 706,842 | 151,135 | ||||||||||
Extensions, discoveries, and other additions | 2,788,686 | 16,288,125 | 5,503,374 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (235,691 | ) | (1,109,057 | ) | (420,534 | ) | |||||||
Balance, August 31, 2012 | 5,085,811 | 33,445,974 | 10,660,140 | ||||||||||
Revision of previous estimates | (194,236 | ) | (2,923,919 | ) | (681,556 | ) | |||||||
Purchase of reserves in place | 1,000,664 | 7,360,752 | 2,227,456 | ||||||||||
Extensions, discoveries, and other additions | 1,576,301 | 4,914,627 | 2,395,406 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (421,265 | ) | (2,107,603 | ) | (772,532 | ) | |||||||
Balance, August 31, 2013 | 7,047,275 | 40,689,831 | 13,828,914 | ||||||||||
Proved developed and undeveloped reserves: | |||||||||||||
Developed at August 31, 2011 | 783,821 | 5,578,067 | 1,713,499 | ||||||||||
Undeveloped at August 31, 2011 | 1,285,884 | 8,683,091 | 2,733,066 | ||||||||||
Balance, August 31, 2011 | 2,069,705 | 14,261,158 | 4,446,565 | ||||||||||
Developed at August 31, 2012 | 2,823,604 | 17,380,806 | 5,720,405 | ||||||||||
Undeveloped at August 31, 2012 | 2,262,207 | 16,065,168 | 4,939,735 | ||||||||||
Balance, August 31, 2012 | 5,085,811 | 33,445,974 | 10,660,140 | ||||||||||
Developed at August 31, 2013 | 4,659,405 | 25,866,008 | 8,970,406 | ||||||||||
Undeveloped at August 31, 2013 | 2,387,870 | 14,823,823 | 4,858,507 | ||||||||||
Balance, August 31, 2013 | 7,047,275 | 40,689,831 | 13,828,913 | ||||||||||
Notable changes in proved reserves for the year ended August 31, 2013 included: | |||||||||||||
· | Purchases of reserves in place. In 2013, purchases of minerals in place of 2.2 million Boe were attributable to the acquisition of 36 producing oil and gas wells and undeveloped acreage from Orr Energy, LLC. Please see the Acquisitions footnote for further information. | ||||||||||||
· | Revision of previous estimates. In 2013, revisions to previous estimates decreased proved developed and undeveloped reserves by a net amount of 681,556 Boe as the Company's drilling schedule was adjusted to reflect the elimination of previously planned vertical drilling locations as the development focus shifted from vertical to horizontal drilling. | ||||||||||||
· | Extensions and discoveries. In 2013, total extensions and discoveries of 2.4 million Boe were primarily attributable to successful drilling in the Wattenberg Field. The new producing wells in this area and their adjacent proved undeveloped locations added during the year increased the Company's proved reserves. | ||||||||||||
Notable changes in proved reserves for the year ended August 31, 2012 included: | |||||||||||||
· | Purchases of reserves in place. In 2012, purchases of minerals in place of 151,135 Boe were attributable to the acquisition of additional working interests in existing wells that the Company already operates. | ||||||||||||
· | Revision of previous estimates. In 2012, revisions to previous estimates increased proved developed and undeveloped reserves by a net amount of 979,601 Boe. Included in these revisions were 451,000 Boe of upward adjustments caused by higher crude oil and natural gas prices, and 528,601 Boe of net upward adjustments attributable to reservoir analysis and well performance. | ||||||||||||
· | Extensions and discoveries. In 2012, total extensions and discoveries of 5.5 million Boe were primarily attributable to successful drilling in the Wattenberg Field. The new producing wells in this area and their adjacent proved undeveloped locations added during the year increased the Company's proved reserves. | ||||||||||||
Notable changes in proved reserves for the year ended August 31, 2011 included: | |||||||||||||
· | Purchases of reserves in place. In 2011, purchases of minerals in place of 2.4 million Boe were attributable to the acquisition of 88 producing oil and gas wells and undeveloped acreage from Petroleum Exploration and Management, LLC. | ||||||||||||
· | Revision of previous estimates. In 2011, revisions to previous estimates increased proved developed and undeveloped reserves by a net amount of 425,623 Boe. The significant increase in previous estimates is due to the more extensive production data on wells on which had limited data in the previous reserve report. The wells drilled in the previous year had limited production history for the wells coming online towards the end of the year. As such, the estimated reserves were based on this limited production history. With a full year of production history available in the current year, the reserve amounts were updated to reflect the more accurate production information. | ||||||||||||
· | Extensions and discoveries. In 2011, total extensions and discoveries of 384,049 Boe were primarily attributable to successful drilling in the Wattenberg Field. The new producing wells in this area and their related proved undeveloped locations added during the year increased the Company's proved reserves. | ||||||||||||
Standardized Measure of Discounted Future Net Cash Flows: The following analysis is a standardized measure of future net cash flows and changes therein related to estimated proved reserves. Future oil and gas sales have been computed by applying average prices of oil and gas during each of the fiscal years presented. Future production and development costs were computed by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs. The calculation assumes the continuation of existing economic conditions, including the use of constant prices and costs. Future income tax expenses were calculated by applying year-end statutory tax rates, with consideration of future tax rates already legislated, to future pretax cash flows relating to proved oil and gas reserves, less the tax basis of properties involved and tax credits and loss carry-forwards relating to oil and gas producing activities. All cash flow amounts are discounted at 10% annually to derive the standardized measure of discounted future cash flows. Actual future cash inflows may vary considerably, and the standardized measure does not necessarily represent the fair value of the Company's oil and gas reserves. Actual future net cash flows from oil and gas properties will also be affected by factors such as actual prices the Company receives for oil and gas, the amount and timing of actual production, supply of and demand for oil and gas, and changes in governmental regulations or taxation. | |||||||||||||
The following table sets forth the Company's future net cash flows relating to proved oil and gas reserves based on the standardized measure prescribed in the ASC (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Future cash inflow | $ | 749,030 | $ | 537,462 | $ | 235,239 | |||||||
Future production costs | (146,352 | ) | (85,612 | ) | (41,278 | ) | |||||||
Future development costs | (108,290 | ) | (100,821 | ) | (40,404 | ) | |||||||
Future income tax expense | (113,545 | ) | (109,349 | ) | (30,738 | ) | |||||||
Future net cash flows | 380,843 | 241,680 | 122,819 | ||||||||||
10% annual discount for estimated timing of cash flows | (199,111 | ) | (139,175 | ) | (65,269 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 181,732 | $ | 102,505 | $ | 57,550 | |||||||
There have been significant fluctuations in the posted prices of oil and natural gas during the last three years. Prices actually received from purchasers of the Company's oil and gas are adjusted from posted prices for location differentials, quality differentials, and BTU content. Estimates of the Company's reserves are based on realized prices. | |||||||||||||
The following table presents the prices used to prepare the reserve estimates, based upon the unweighted arithmetic average of the first day of the month price for each month within the 12 month period prior to the end of the respective reporting period presented: | |||||||||||||
Oil (Bbl) | Gas (Mcf) | ||||||||||||
August 31, 2011 (Average) | $ | 84.9 | $ | 5.07 | |||||||||
August 31, 2012 (Average) | $ | 86.68 | $ | 3.76 | |||||||||
August 31, 2013 (Average) | $ | 86.4 | $ | 4.4 | |||||||||
Changes in the Standardized Measure of Discounted Future Net Cash Flows: The principle sources of change in the standardized measure of discounted future net cash flows are (in thousands): | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Standardized measure, beginning of year | $ | 102,505 | $ | 57,550 | $ | 13,022 | |||||||
Sale and transfers, net of production costs | (38,569 | ) | (21,321 | ) | (8,337 | ) | |||||||
Net changes in prices and production costs | (4,550 | ) | (6,023 | ) | 15,484 | ||||||||
Extensions, discoveries, and improved recovery | 70,191 | 69,073 | 13,693 | ||||||||||
Changes in estimated future development costs | (6,006 | ) | (42,578 | ) | (20,471 | ) | |||||||
Development costs incurred during the period | 5,106 | 39,739 | 16,252 | ||||||||||
Revision of quantity estimates | (14,214 | ) | 21,058 | 15,424 | |||||||||
Accretion of discount | 35,103 | 15,379 | 3,245 | ||||||||||
Net change in income taxes | (7,850 | ) | (30,832 | ) | (12,012 | ) | |||||||
Purchase of reserves in place | 40,016 | 460 | 21,250 | ||||||||||
Standardized measure, end of year | $ | 181,732 | $ | 102,505 | $ | 57,550 |
Unaudited_Quarterly_Financial_
Unaudited Quarterly Financial Data | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Unaudited Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
Unaudited Quarterly Financial Data | ' | ||||||||||||||||
17. | Unaudited Quarterly Financial Data | ||||||||||||||||
The Company's quarterly financial information for the years ended August 31, 2013 and 2012 is as follows (in thousands, except share data): | |||||||||||||||||
For the Year Ended August 31, 2013 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Revenues | $ | 8,314 | $ | 10,921 | $ | 12,314 | $ | 14,674 | |||||||||
Expenses | 4,768 | 6,439 | 7,449 | 8,022 | |||||||||||||
Operating income | 3,546 | 4,482 | 4,865 | 6,652 | |||||||||||||
Other income (expense) | 7 | (146 | ) | 451 | (3,406 | ) | |||||||||||
Income before income taxes | 3,553 | 4,336 | 5,316 | 3,246 | |||||||||||||
Income tax provision (4) | 1,315 | 1,604 | 1,701 | 2,250 | |||||||||||||
Net income | $ | 2,238 | $ | 2,732 | $ | 3,615 | $ | 996 | |||||||||
Net income per common share: (1) | |||||||||||||||||
Basic | $ | 0.04 | $ | 0.05 | $ | 0.07 | $ | 0.02 | |||||||||
Diluted | $ | 0.04 | $ | 0.05 | $ | 0.06 | $ | 0.01 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 51,661,704 | 54,900,326 | 55,238,098 | 66,283,325 | |||||||||||||
Diluted | 53,616,182 | 56,481,752 | 58,918,586 | 70,176,105 | |||||||||||||
For the Year Ended August 31, 2012 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Revenues | $ | 4,479 | $ | 6,219 | $ | 7,522 | $ | 6,750 | |||||||||
Expenses | 2,860 | 3,344 | 3,676 | 3,336 | |||||||||||||
Operating income | 1,619 | 2,875 | 3,846 | 3,414 | |||||||||||||
Other income (expense) | 8 | 3 | 17 | 10 | |||||||||||||
Income before income taxes | 1,627 | 2,878 | 3,863 | 3,424 | |||||||||||||
Income tax provision (benefit) (2, 3) | - | (3,241 | ) | 1,432 | 1,477 | ||||||||||||
Net income | $ | 1,627 | $ | 6,119 | $ | 2,431 | $ | 1,947 | |||||||||
Net income per common share: (1) | |||||||||||||||||
Basic | $ | 0.05 | $ | 0.13 | $ | 0.05 | $ | 0.04 | |||||||||
Diluted | $ | 0.04 | $ | 0.12 | $ | 0.05 | $ | 0.04 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 36,098,212 | 47,445,178 | 51,292,810 | 51,409,340 | |||||||||||||
Diluted | 37,845,212 | 49,229,042 | 53,174,792 | 53,072,619 | |||||||||||||
1 | The sum of net income per common share for the four quarters may not agree with the annual amount reported because the number used as the denominator for each quarterly computation is based on the weighted-average number of shares outstanding during that quarter whereas the annual computation is based upon an average for the entire year. | ||||||||||||||||
2 | No income tax was recognized during the three months ended November 30, 2011 as the provision for tax at the effective rate was offset by a change in the valuation allowance. | ||||||||||||||||
3 | For the three months ended February 29, 2012, the entire valuation allowance of $4.9 million was released and a net deferred tax benefit of $3.2 million was recorded. | ||||||||||||||||
4 | For the three months ended August 31, 2013, income taxes were provided at a higher than expected rate due to a downward adjustment in the deferred tax asset related to the expiration of underlying stock options. | ||||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Aug. 31, 2013 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events | ' | |
18. | Subsequent Events | |
Agreements to Acquire Oil and Gas Properties | ||
Subsequent to August 31, 2013, the Company conducted due diligence activities for the purpose of acquiring oil and gas properties, including interests in 68 producing oil and gas wells, and various other assets. All of the producing wells are located in the Wattenberg Field. | ||
One agreement, signed on August 27, 2013, covers interests in 47 oil and gas wells, including 38 wells operated by the seller, plus leases covering approximately 3,639 gross (1,006 net) acres, and certain other assets. The preliminary purchase price, subject to ordinary closing adjustments, is $17.5 million, consisting of cash consideration of $13.1 million, plus issuance of shares of the Company's restricted common stock with a value of $4.4 million. | ||
The other agreement, signed on September 16, 2013, covers interests in 21 producing oil and gas wells operated by the seller, plus leases covering approximately 800 net acres. The preliminary purchase price, subject to ordinary closing adjustments, is $20.5 million, consisting of cash consideration of $17.8 million plus issuance of shares of the Company's restricted common stock with a value of $2.7 million. | ||
Both agreements are subject to satisfactory completion of due diligence activities and other conditions normal for a transaction of this nature. Both closings are expected to occur during November. | ||
Exercise of Series C Warrants | ||
Subsequent to August 31, 2013, the Company issued approximately 4.3 million shares pursuant to the exercise of Series C warrants and received proceeds of approximately $25.7 million. |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policy) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Organization and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||
Basis of Presentation | ' | ||||||||||||
Basis of Presentation: The Company has adopted August 31st as the end of its fiscal year. The Company does not utilize any special purpose entities. | |||||||||||||
At the directive of the Securities and Exchange Commission to use "plain English" in public filings, the Company will use such terms as "we," "our," "us" or "the Company" in place of Synergy Resources Corporation. When such terms are used in this manner throughout this document, they are in reference only to the corporation, Synergy Resources Corporation, and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees. | |||||||||||||
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). | |||||||||||||
Reclassifications | ' | ||||||||||||
Reclassifications: Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates: The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, including oil and gas reserves, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary. Actual results could differ from these estimates. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and Cash Equivalents: The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of less than three months to be cash and cash equivalents. | |||||||||||||
Short-Term Investments | ' | ||||||||||||
Short-Term Investments: As part of its cash management strategies, the Company invests in short-term interest bearing deposits such as certificates of deposits with maturities of less than one year. | |||||||||||||
Inventory | ' | ||||||||||||
Inventory: Inventories consist primarily of tubular goods and well equipment to be used in future drilling operations or repair operations and are carried at the lower of cost or market | |||||||||||||
Oil and Gas Properties | ' | ||||||||||||
Oil and Gas Properties: The Company uses the full cost method of accounting for costs related to its oil and gas properties. Accordingly, all costs associated with acquisition, exploration, and development of oil and gas reserves (including the costs of unsuccessful efforts) are capitalized into a single full cost pool. These costs include land acquisition costs, geological and geophysical expense, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities. Under the full cost method, no gain or loss is recognized upon the sale or abandonment of oil and gas properties unless non-recognition of such gain or loss would significantly alter the relationship between capitalized costs and proved oil and gas reserves. | |||||||||||||
Capitalized costs of oil and gas properties are depleted using the unit-of-production method based upon estimates of proved reserves. For depletion purposes, the volume of petroleum reserves and production is converted into a common unit of measure at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil. Investments in unevaluated properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. | |||||||||||||
Wells in progress represent the costs associated with the drilling of oil and gas wells that have yet to be completed as of August 31, 2013. Since the wells had not been completed as of August 31, 2013, they were classified within unevaluated oil and gas properties and were withheld from the depletion calculation and the ceiling test. The costs for these wells will be transferred into proved property when the wells commence production and will become subject to depletion and the ceiling test calculation in subsequent periods. | |||||||||||||
Under the full cost method of accounting, a ceiling test is performed each quarter. The full cost ceiling test is an impairment test prescribed by SEC regulations. The ceiling test determines a limit on the book value of oil and gas properties. The capitalized costs of proved and unproved oil and gas properties, net of accumulated depreciation, depletion, and amortization, and the related deferred income taxes, may not exceed the estimated future net cash flows from proved oil and gas reserves, less future cash outflows associated with asset retirement obligations that have been accrued, plus the cost of unproved properties not being amortized, plus the lower of cost or estimated fair value of unproven properties being amortized. Prices are held constant for the productive life of each well. Net cash flows are discounted at 10%. If net capitalized costs exceed this limit, the excess is charged to expense and reflected as additional accumulated depreciation, depletion and amortization. The calculation of future net cash flows assumes continuation of current economic conditions. Once impairment expense is recognized, it cannot be reversed in future periods, even if increasing prices raise the ceiling amount. No provision for impairment was required for the twelve months ended August 31, 2013 or 2012. | |||||||||||||
The oil and natural gas prices used to calculate the full cost ceiling limitation are based upon a 12 month rolling average, calculated as the unweighted arithmetic average of the first day of the month price for each month within the 12 month period prior to the end of the reporting period, unless prices are defined by contractual arrangements. Prices are adjusted for basis or location differentials. | |||||||||||||
Oil and Gas Reserves | ' | ||||||||||||
Oil and Gas Reserves: Oil and gas reserves represent theoretical, estimated quantities of crude oil and natural gas which geological and engineering data estimate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. There are numerous uncertainties inherent in estimating oil and gas reserves and their values, including many factors beyond the Company's control. Accordingly, reserve estimates are different from the future quantities of oil and gas that are ultimately recovered and the corresponding lifting costs associated with the recovery of these reserves. | |||||||||||||
The determination of depletion and amortization expenses, as well as the ceiling test calculation related to the recorded value of the Company's oil and natural gas properties, is highly dependent on estimates of proved oil and natural gas reserves. | |||||||||||||
Capitalized Interest | ' | ||||||||||||
Capitalized Interest: The Company capitalizes interest on expenditures made in connection with acquisition of mineral interests and development projects that are not subject to current amortization. Interest is capitalized during the period that activities are in progress to bring the projects to their intended use. See Note 9 for additional information. | |||||||||||||
Capitalized Overhead | ' | ||||||||||||
Capitalized Overhead: A portion of the Company's overhead expenses are directly attributable to acquisition and development activities. Under the full cost method of accounting, these expenses in the amounts shown in the table below were capitalized in the full cost pool (in thousands). | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Capitalized overhead | $ | 637 | $ | 345 | $ | 206 | |||||||
Well Costs Payable | ' | ||||||||||||
Well Costs Payable: The cost of wells in progress are recorded as incurred, generally based upon invoiced amounts or joint interest billings ("JIB"). For those instances in which an invoice or JIB is not received on a timely basis, estimated costs are accrued to oil and gas properties, generally based on the Authorization for Expenditure ("AFE"). | |||||||||||||
Other Property and Equipment | ' | ||||||||||||
Other Property and Equipment: Support equipment (including such items as vehicles, well servicing equipment, and office furniture and equipment) is stated at the lower of cost or market. Depreciation of support equipment is computed using primarily the straight-line method over periods ranging from five to seven years. | |||||||||||||
Asset Retirement Obligations | ' | ||||||||||||
Asset Retirement Obligations: The Company's activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the asset is permanently removed from service. Calculation of an asset retirement obligation ("ARO") requires estimates about several future events, including the life of the asset, the costs to remove the asset from service, and inflation factors. The ARO is initially estimated based upon discounted cash flows over the life of the asset and is accreted to full value over time using the Company's credit adjusted risk free interest rate. Estimates are periodically reviewed and adjusted to reflect changes. | |||||||||||||
The present value of a liability for the ARO is initially recorded when it is incurred if a reasonable estimate of fair value can be made. This is typically when a well is completed or an asset is placed in service. When the ARO is initially recorded, the Company capitalizes the cost (asset retirement cost or "ARC") by increasing the carrying value of the related asset. ARCs related to wells are capitalized to the full cost pool and subject to depletion. Over time, the liability increases for the change in its present value (accretion of ARO), while the net capitalized cost decreases over the useful life of the asset, as depletion expense is recognized. In addition, ARCs are included in the ceiling test calculation for valuing the full cost pool. | |||||||||||||
Derivative Conversion Liability | ' | ||||||||||||
Derivative Conversion Liability: The Company accounted for the embedded conversion features in its convertible promissory notes, issued during fiscal year 2010, in accordance with the guidance for derivative instruments, which requires a periodic valuation of their fair value and a corresponding recognition of liabilities associated with such derivatives. The recognition of derivative conversion liabilities related to the issuance of convertible debt was applied first to the proceeds of such issuance as a debt discount at the date of the issuance. All subsequent increases or decreases in the fair value of derivative conversion liabilities were recognized as a charge or credit to other income (expense) in results of operations. In connection with the conversion of convertible promissory notes into shares of the Company's common stock, derivative conversion liabilities were reclassified to additional paid-in-capital. The amounts recognized in the financial statements follow. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
(in thousands) | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Non-cash expense recognized related to the change in | |||||||||||||
the fair value of derivative conversion liabilities | $ | - | $ | - | $ | 10,229 | |||||||
Derivative conversion liabilities recognized in additional | |||||||||||||
paid-in-capital | $ | - | $ | - | $ | 19,554 | |||||||
Debt Issuance Costs | ' | ||||||||||||
Debt Issuance Costs: Debt issuance costs incurred in connection with executing convertible promissory notes between December 29, 2009, and March 12, 2011 were classified as a long-term asset. However, as a result of the conversion of all outstanding convertible promissory notes into shares of the Company's common stock, all debt issuance costs were recognized as a component of interest expense through August 31, 2011. | |||||||||||||
Oil and Gas Sales | ' | ||||||||||||
Oil and Gas Sales: The Company derives revenue primarily from the sale of crude oil and natural gas produced on its properties. Revenues from production on properties in which the Company shares an economic interest with other owners are recognized on the basis of the Company's pro-rata interest. Revenues are reported on a gross basis for the amounts received before taking into account production taxes and lease operating costs, which are reported as separate expenses. Revenue is recorded and receivables are accrued using the sales method, which occurs in the month production is delivered to the purchaser, at which time ownership of the oil is transferred to the purchaser. Payment is generally received between thirty and ninety days after the date of production. Provided that reasonable estimates can be made, revenue and receivables are accrued to recognize delivery of product to the purchaser. Differences between estimates and actual volumes and prices, if any, are adjusted upon final settlement. | |||||||||||||
Major Customers and Operating Region | ' | ||||||||||||
Major Customers and Operating Region: The Company operates exclusively within the United States of America. Except for cash and short-term investments, all of the Company's assets are employed in and all of its revenues are derived from the oil and gas industry. The table below presents the percentages of oil and gas revenue resulting from purchases by major customers. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 50% | 68% | 75% | ||||||||||
Company B | 15% | 11% | 21% | ||||||||||
The Company sells production to a small number of customers, as is customary in the industry. Based on the current demand for oil and natural gas, the availability of other buyers, and the Company having the option to sell to other buyers if conditions so warrant, the Company believes that its oil and gas production can be sold in the market in the event that it is not sold to the Company's existing customers. However, in some circumstances, a change in customers may entail significant transition costs and/or shutting in or curtailing production for weeks or even months during the transition to a new customer. | |||||||||||||
Accounts receivable consist primarily of trade receivables from oil and gas sales and amounts due from other working interest owners whom have been billed for their proportionate share of well costs. The Company typically has the right to withhold future revenue disbursements to recover outstanding joint interest billings on outstanding receivables from joint interest owners. | |||||||||||||
Customers with balances greater than 10% of total receivable balances as of each of the fiscal year ends presented are shown in the following table: | |||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 24% | 35% | 31% | ||||||||||
Company B | 23% | 30% | 31% | ||||||||||
Company C | 12% | * | 13% | ||||||||||
* less than 10% | |||||||||||||
Lease Operating Expenses | ' | ||||||||||||
Lease Operating Expenses: Costs incurred to operate and maintain wells and related equipment and facilities are expensed as incurred. Lease operating expenses (also referred to as production or lifting costs) include the costs of labor to operate the wells and related equipment and facilities, repairs and maintenance, materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities, property taxes and insurance applicable to proved properties and wells and related equipment and facilities. | |||||||||||||
Stock-Based Compensation | ' | ||||||||||||
Stock-Based Compensation: The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date, calculated using the Black-Scholes-Merton option pricing model. The expense is recognized over the vesting period of the grant. See Note 11 below for additional information. | |||||||||||||
Income Tax | ' | ||||||||||||
Income Tax: Income taxes are computed using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, their respective tax bases as well as the effect of net operating losses, tax credits and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized in the results of operations in the period that includes the enactment date. | |||||||||||||
No significant uncertain tax positions were identified as of any date on or before August 31, 2013. The Company's policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As of August 31, 2013, the Company has not recognized any interest or penalties related to uncertain tax benefits. For further information, see Note 12 below. | |||||||||||||
Financial Instruments | ' | ||||||||||||
Financial Instruments: The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of less than three months to be cash and cash equivalents. A substantial portion of the Company's financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, trade accounts payable, accrued expenses, and obligations under the revolving line of credit facility, all of which are considered to be representative of their fair value due to the short-term and highly liquid nature of these instruments. | |||||||||||||
Financial instruments, whether measured on a recurring or non-recurring basis, are recorded at fair value. A fair value hierarchy, established by the Financial Accounting Standards Board, prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). | |||||||||||||
As discussed in Note 5, the Company incurred asset retirement obligations during the periods presented, the value of which was determined using unobservable pricing inputs (or Level 3 inputs). The Company uses the income valuation technique to estimate the fair value of the obligation using several assumptions and judgments about the ultimate settlement amounts, inflation factors, credit adjusted discount rates, and timing of settlement. | |||||||||||||
Commodity Derivative Instruments | ' | ||||||||||||
Commodity Derivative Instruments: The Company has entered into commodity derivative instruments, primarily utilizing swaps or "no premium" collars to reduce the effect of price changes on a portion of our future oil production. The Company's commodity derivative instruments are measured at fair value and are included in the accompanying balance sheets as commodity derivative assets and liabilities. Unrealized gains and losses are recorded based on the changes in the fair values of the derivative instruments. Both the unrealized and realized gains and losses resulting from the contract settlement of derivatives are recorded in the commodity derivative line on the statement of operations. We value our derivative instruments by obtaining independent market quotes, as well as using industry standard models that consider various assumptions, including quoted forward prices for commodities, risk free interest rates, and estimated volatility factors, as well as other relevant economic measures. We compare the valuations calculated by us to valuations provided by the counterparties to assess the reasonableness of each valuation. The discount rate used in the fair values of these instruments includes a measure of nonperformance risk by the counterparty or us, as appropriate. For additional discussion, please refer to Note 7-Commodity Derivative Instruments. | |||||||||||||
Earnings Per Share Amounts | ' | ||||||||||||
Earnings Per Share Amounts: Basic earnings per share includes no dilution and is computed by dividing net income or loss by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. The number of potential shares outstanding relating to stock options and warrants is computed using the treasury stock method. Potentially dilutive securities outstanding are not included in the calculation when such securities would have an anti-dilutive effect on earnings per share. | |||||||||||||
The following table sets forth the share calculation of diluted earnings per share. | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Weighted-average shares outstanding - basic | 57,089,362 | 46,587,558 | 26,009,283 | ||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 1,881,682 | 1,380,861 | - | ||||||||||
Warrants | 117,717 | 391,486 | - | ||||||||||
Weighted-average shares outstanding - diluted | 59,088,761 | 48,359,905 | 26,009,283 | ||||||||||
The following potentially dilutive securities outstanding for the fiscal years presented were not included in the respective earnings per share calculation above, as such securities had an anti-dilutive effect on earnings per share: | |||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 670,000 | 2,495,000 | 4,645,000 | ||||||||||
Warrants | 8,500,000 | 14,098,000 | 14,931,067 | ||||||||||
Total | 9,170,000 | 16,593,000 | 19,576,067 | ||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||
Recent Accounting Pronouncements: The Company evaluates the pronouncements of various authoritative accounting organizations to determine the impact of new pronouncements on US GAAP and the impact on the Company. There were various updates recently issued by the Financial Accounting Standards Board, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. | |||||||||||||
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Organization and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||
Schedule of Capitalized Overhead | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Capitalized overhead | $ | 637 | $ | 345 | $ | 206 | |||||||
Schedule of Derivative Conversion Liability | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
(in thousands) | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Non-cash expense recognized related to the change in | |||||||||||||
the fair value of derivative conversion liabilities | $ | - | $ | - | $ | 10,229 | |||||||
Derivative conversion liabilities recognized in additional | |||||||||||||
paid-in-capital | $ | - | $ | - | $ | 19,554 | |||||||
Schedule of Major Customers | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 50% | 68% | 75% | ||||||||||
Company B | 15% | 11% | 21% | ||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Company A | 24% | 35% | 31% | ||||||||||
Company B | 23% | 30% | 31% | ||||||||||
Company C | 12% | * | 13% | ||||||||||
* less than 10% | |||||||||||||
Schedule of Earnings Per Share | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Weighted-average shares outstanding - basic | 57,089,362 | 46,587,558 | 26,009,283 | ||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 1,881,682 | 1,380,861 | - | ||||||||||
Warrants | 117,717 | 391,486 | - | ||||||||||
Weighted-average shares outstanding - diluted | 59,088,761 | 48,359,905 | 26,009,283 | ||||||||||
Schedule of Potentially Dilutive Securities | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Potentially dilutive common shares from: | |||||||||||||
Stock options | 670,000 | 2,495,000 | 4,645,000 | ||||||||||
Warrants | 8,500,000 | 14,098,000 | 14,931,067 | ||||||||||
Total | 9,170,000 | 16,593,000 | 19,576,067 | ||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||||||
Property and Equipment [Abstract] | ' | ||||||||||||||||||||
Schedule of Capitalized Costs | ' | ||||||||||||||||||||
As of August 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Oil and gas properties, full cost method: | |||||||||||||||||||||
Unevaluated costs, not subject to amortization: | |||||||||||||||||||||
Lease acquisition and other costs | $ | 38,826 | $ | 27,070 | |||||||||||||||||
Wells in progress | 25,889 | 5,414 | |||||||||||||||||||
Subtotal, unevaluated costs | 64,715 | 32,484 | |||||||||||||||||||
Evaluated costs: | |||||||||||||||||||||
Producing and non-producing | 155,755 | 69,667 | |||||||||||||||||||
Total capitalized costs | 220,470 | 102,151 | |||||||||||||||||||
Less, accumulated depletion | (22,776 | ) | (9,731 | ) | |||||||||||||||||
Oil and gas properties, net | 197,694 | 92,420 | |||||||||||||||||||
Other property and equipment | 544 | 436 | |||||||||||||||||||
Less, accumulated depreciation | (273 | ) | (154 | ) | |||||||||||||||||
Other property and equipment, net | 271 | 282 | |||||||||||||||||||
Total property and equipment, net | $ | 197,965 | $ | 92,702 | |||||||||||||||||
Schedule of Costs Incurred | ' | ||||||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Acquisition of property: | |||||||||||||||||||||
Unproved | $ | 12,295 | $ | 9,145 | $ | 9,198 | |||||||||||||||
Proved | 43,143 | 459 | 21,251 | ||||||||||||||||||
Exploration costs | - | - | - | ||||||||||||||||||
Development costs | 61,128 | 39,739 | 14,997 | ||||||||||||||||||
Asset retirement obligation | 1,578 | 300 | 351 | ||||||||||||||||||
Total costs incurred | $ | 118,144 | $ | 49,643 | $ | 45,797 | |||||||||||||||
Schedule of Capitalized Costs Excluded from Amortization | ' | ||||||||||||||||||||
Period Incurred | Total as of | ||||||||||||||||||||
August 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | Prior | 2013 | |||||||||||||||||
Unproved leasehold acquisition costs | $ | 11,757 | $ | 9,636 | $ | 16,585 | $ | 848 | $ | 38,826 | |||||||||||
Unevaluated development costs | 25,889 | - | - | - | $ | 25,889 | |||||||||||||||
Total unevaluted costs | $ | 37,646 | $ | 9,636 | $ | 16,585 | $ | 848 | $ | 64,715 | |||||||||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Acquisition [Abstract] | ' | ||||||||
Schedule of Fair Value of Acquisition | ' | ||||||||
Purchase Price | December 5, | ||||||||
2012 | |||||||||
Consideration Given | |||||||||
Cash | $ | 29,012 | |||||||
Synergy Resources Corp. Common Stock * | 13,515 | ||||||||
Total consideration given | $ | 42,527 | |||||||
Allocation of Purchase Price | |||||||||
Proved oil and gas properties | $ | 43,143 | |||||||
Unproved oil and gas properties | 466 | ||||||||
Total fair value of oil and gas properties acquired | 43,609 | ||||||||
Working capital | $ | (842 | ) | ||||||
Asset retirement obligation | (240 | ) | |||||||
Fair value of net assets acquired | $ | 42,527 | |||||||
Working capital acquired was estimated as follows: | |||||||||
Accounts receivable | 521 | ||||||||
Accrued liabilities and expenses | (1,363 | ) | |||||||
Total working capital | $ | (842 | ) | ||||||
* | The fair value of the consideration attributed to the Common Stock under ASC 805 was based on the Company's closing stock price on the measurement date of December 5, 2012. (3,128,422 shares at $4.32 per share) | ||||||||
Schedule of Pro Forma Results | ' | ||||||||
For the years ended August 31, | |||||||||
(Unaudited) | |||||||||
2013 | 2012 | ||||||||
Oil and Gas Revenues | $ | 47,760 | $ | 32,188 | |||||
Net income | $ | 10,118 | $ | 14,870 | |||||
Earnings per common share | |||||||||
Basic | $ | 0.17 | $ | 0.3 | |||||
Diluted | $ | 0.17 | $ | 0.29 | |||||
Depletion_depreciation_and_amo1
Depletion, depreciation and amortization ("DDA") (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Depletion, depreciation and amortization ("DDA") [Abstract] | ' | ||||||||||||
Schedule of Depreciation, Depletion and Amortization Expense | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Depletion | $ | 13,046 | $ | 5,838 | $ | 2,743 | |||||||
Depreciation and amortization | 290 | 172 | 95 | ||||||||||
Total DDA Expense | $ | 13,336 | $ | 6,010 | $ | 2,838 | |||||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 12 Months Ended | ||||||||
Aug. 31, 2013 | |||||||||
Asset Retirement Obligations [Abstract] | ' | ||||||||
Schedule of Assumptions Used To Determine the Fair Value of Asset Removal Obligations | ' | ||||||||
For the Years Ended August 31, | |||||||||
2013 | 2012 | ||||||||
Inflation rate | 3.9 - 4.0% | 3.9 - 4.0% | |||||||
Estimated asset life | 24.0 - 40.0 years | 24.0 - 27.6 years | |||||||
Credit adjusted risk free interest rate | 8.0 - 11.2% | 11.2 - 11.7% | |||||||
Schedule of Changes in Asset Retirement Obligations | ' | ||||||||
As of August 31, | |||||||||
2013 | 2012 | ||||||||
Beginning asset retirement obligation | $ | 1,027 | $ | 644 | |||||
Liabilities incurred | 376 | 300 | |||||||
Liabilities assumed | 240 | - | |||||||
Liabilities settled | - | - | |||||||
Accretion expense | 172 | 83 | |||||||
Revisions in previous estimates | 962 | - | |||||||
$ | 2,777 | $ | 1,027 |
Commodity_Derivative_Instrumen1
Commodity Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Commodity Derivative Instruments [Abstract] | ' | ||||||||||||
Schedule of Commodity Derivative Contracts | ' | ||||||||||||
Contract Type | Basis (1) | Quantity | Strike Price | Term | |||||||||
(Bbl/month) | ($/Bbl) | ||||||||||||
Collar | NYMEX | 3,014 | $87.00 - $102.50 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Collar | NYMEX | 1,840 | $85.00 - $98.50 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Collar | NYMEX | 7,000 | $80.00 - $92.50 | Jan 1, 2015 - Jun 30, 2015 | |||||||||
Contract Type | Basis (1) | Quantity | Swap Price | Term | |||||||||
(Bbl/month) | ($/Bbl) | ||||||||||||
Swap | NYMEX | 3,014 | $91.70 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Swap | NYMEX | 6,000 | $96.35 | Sept 1, 2013 - Dec 31, 2013 (2) | |||||||||
Swap | NYMEX | 8,000 | $94.45 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
Swap | NYMEX | 15,000 | $98.00 | Sept 1, 2013 - Dec 31, 2013 | |||||||||
2013 Total/Average | 32,014 | $95.13 | |||||||||||
Swap | NYMEX | 1,840 | $90.80 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 2,000 | $90.11 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 5,000 | $90.50 | Jan 1, 2014 - Dec 31, 2014 | |||||||||
Swap | NYMEX | 15,000 | $98.00 | Jan 1, 2014 - Feb 28, 2014 | |||||||||
2014 Total/Average | 23,840 | $92.35 | |||||||||||
(1) NYMEX refers to WTI quoted prices on the New York Mercantile Exchange | |||||||||||||
(2) In connection with entering into these swaps with premium hedged prices, the counterparty has the right, but not the obligation to extend the swap to January 1, 2014 through December 31, 2014 at the current strike price and quantity. This option expires on December 31, 2013. | |||||||||||||
Schedule of Fair Value of Derivatives | ' | ||||||||||||
As of August 31, | |||||||||||||
Underlying Commodity | Balance Sheet Location | 2013 | 2012 | ||||||||||
Crude Oil derivative contract | Current liabilities | $ | 2,315 | $ | - | ||||||||
Crude Oil derivative contract | Noncurrent liabilities | $ | 334 | $ | - | ||||||||
Schedule of Gain (Loss) Recognized in Statements of Operations | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Unrealized loss on commodity derivatives | $ | 2,649 | $ | - | $ | - | |||||||
Realized loss on commodity derivatives | 395 | - | - | ||||||||||
Total loss | $ | 3,044 | $ | - | $ | - |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Schedule of Assets and Liabilities Measured on a Recurring Basis | ' | ||||||||||||||||
Fair Value Measurements at August 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets and liabilities: | |||||||||||||||||
Commodity derivative asset | $ | - | $ | - | $ | - | $ | - | |||||||||
Commodity derivative liability | $ | - | $ | 2,649 | $ | - | $ | 2,649 | |||||||||
Fair Value Measurements at August 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets and liabilities: | |||||||||||||||||
Commodity derivative asset | $ | - | $ | - | $ | - | $ | - | |||||||||
Commodity derivative liability | $ | - | $ | - | $ | - | $ | - | |||||||||
Interest_Expense_Tables
Interest Expense (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Interest Expense [Abstract] | ' | ||||||||||||
Schedule of the Components of Interest Expense | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revolving bank credit facility at a variable rate | $ | 1,067 | $ | 108 | $ | 41 | |||||||
Convertible promissory notes at 8% | - | - | 590 | ||||||||||
Related party note payable at 5.25% | - | 68 | 74 | ||||||||||
Accretion of debt discount | - | - | 2,664 | ||||||||||
Amortization of debt issuance costs | 160 | 32 | 1,588 | ||||||||||
Less, interest capitalized | (1,130 | ) | (208 | ) | (710 | ) | |||||||
Interest expense, net | $ | 97 | $ | - | $ | 4,247 |
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Shareholders' Equity [Abstract] | ' | ||||||||||||||||
Schedule of Classes of Stock | ' | ||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Preferred stock, par value | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||||
Preferred stock, shares issued and outstanding | nil | nil | nil | ||||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||||||
Common stock, par value | $ | 0.001 | $ | 0.001 | $ | 0.001 | |||||||||||
Common stock, shares issued and outstanding | 70,587,723 | 51,409,340 | 36,098,212 | ||||||||||||||
Schedule of Common Stock Sold in Public Offering | ' | ||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of common shares sold | 13,225,000 | 14,363,363 | 9,000,000 | ||||||||||||||
Offering price per common share | $ | 6.25 | $ | 2.75 | $ | 2 | |||||||||||
Net proceeds (in thousands) | $ | 78,243 | $ | 37,422 | $ | 16,691 | |||||||||||
Schedule of Common Stock Issued For Acquisition of Mineral Interests and Services | ' | ||||||||||||||||
For the Years Ended August 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Number of common shares issued for mineral property leases | 687,122 | 669,765 | 1,864,838 | ||||||||||||||
Number of common shares issued for Orr Energy acquisition | 3,128,422 | - | - | ||||||||||||||
Total common shares issued | 3,815,544 | 669,765 | 1,864,838 | ||||||||||||||
Average price per common share | $ | 4.37 | $ | 3.12 | $ | 3.04 | |||||||||||
Aggregate value of shares issues (in thousands) | 16,684 | $ | 2,090 | $ | 5,670 | ||||||||||||
Schedule of Outstanding Common Stock Warrant Activity | ' | ||||||||||||||||
Number of Shares Issuable Upon Warrant Exercise | Weighted Average Exercise Price Per Share | ||||||||||||||||
Outstanding, August 31, 2010 | 15,286,466 | $ | 5.92 | ||||||||||||||
Exercised | 355,399 | $ | 1.6 | ||||||||||||||
Outstanding, August 31, 2011 | 14,931,067 | $ | 6.02 | ||||||||||||||
Granted | 100,000 | $ | 2.69 | ||||||||||||||
Exercised | - | $ | - | ||||||||||||||
Outstanding, August 31, 2012 | 15,031,067 | $ | 6.02 | ||||||||||||||
Exercised | 1,216,265 | $ | 3.44 | ||||||||||||||
Forfeited / Expired | 5,148,000 | $ | 6.74 | ||||||||||||||
Outstanding, August 31, 2013 | 8,666,802 | $ | 5.92 | ||||||||||||||
Schedule of Issued and Outstanding Common Stock Warrants | ' | ||||||||||||||||
Description | Number of | Exercise | Remaining | Exercise Price | |||||||||||||
Shares | Price | Contractual | times number | ||||||||||||||
Life (in years) | of shares | ||||||||||||||||
Series C | 8,500,000 | $ | 6 | 1.3 | $ | 51,000,000 | |||||||||||
Series D | 141,802 | $ | 1.6 | 1.3 | $ | 226,883 | |||||||||||
Investor Relations | 25,000 | $ | 2.69 | 2.3 | $ | 67,250 | |||||||||||
Total | 8,666,802 | $ | 51,294,133 | ||||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||||
Schedule of Stock-based Compensation Expenses Recognized | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Stock options | $ | 1,039 | $ | 443 | $ | 197 | |||||||
Restricted stock grants | 277 | 17 | 430 | ||||||||||
Investor relations warrants | 46 | 13 | - | ||||||||||
$ | 1,362 | $ | 473 | $ | 627 | ||||||||
Schedule of Employee Stock Options Granted During the Period | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Number of options to purchase common shares | 1,025,000 | 275,000 | 425,000 | ||||||||||
Weighted average exercise price | $ | 6.05 | $ | 2.96 | $ | 3.79 | |||||||
Term (in years) | 10 years | 10 years | 10 years | ||||||||||
Vesting Period (in years) | 3-5 years | 4-5 years | 4-5 years | ||||||||||
Fair Value (in thousands) | $ | 4,179 | $ | 519 | $ | 990 | |||||||
Schedule of Assumptions Used In Valuing Stock Options | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected term | 6.2 years | 6.5 years | 6.0 - 6.5 years | ||||||||||
Expected volatility | 77 | % | 56.7 - 69.4 | % | 53.2 - 69.4 | % | |||||||
Risk free rate | 0.89-2.11 | % | 1.01-1.42 | % | 1.48-2.63 | % | |||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||||
Forfeiture rate | 0 | % | 0.0 - 0.7 | % | 0 | % | |||||||
Schedule of Stock Option Activity | ' | ||||||||||||
Number of | Weighted | ||||||||||||
Shares | Average | ||||||||||||
Exercise Price | |||||||||||||
Outstanding, August 31, 2010 | 4,220,000 | $ | 5.36 | ||||||||||
Granted | 425,000 | $ | 3.79 | ||||||||||
Exercised | - | $ | - | ||||||||||
Outstanding, August 31, 2011 | 4,645,000 | $ | 5.21 | ||||||||||
Granted | 275,000 | $ | 2.96 | ||||||||||
Exercised | - | $ | - | ||||||||||
Forfeited | (5,000 | ) | $ | 3.4 | |||||||||
Outstanding, August 31, 2012 | 4,915,000 | $ | 5.09 | ||||||||||
Granted | 1,025,000 | $ | 6.05 | ||||||||||
Exercised | (2,120,000 | ) | $ | 1.1 | |||||||||
Expired | (2,000,000 | ) | $ | 10 | |||||||||
Outstanding, August 31, 2013 | 1,820,000 | $ | 4.88 | ||||||||||
Schedule of Issued and Outstanding Stock Options | ' | ||||||||||||
Outstanding | Vested | ||||||||||||
Options | Options | ||||||||||||
Number of shares | 1,820,000 | 373,000 | |||||||||||
Weighted average remaining contractual life | 8.7 years | 7.7 years | |||||||||||
Weighted average exercise price | $ | 4.88 | $ | 3.71 | |||||||||
Aggregate intrinsic value (in thousands) | $ | 8,160 | $ | 2,107 | |||||||||
Schedule of Estimated Unrecognized Compensation Cost From Unvested Stock Options | ' | ||||||||||||
Unvested Options | |||||||||||||
at August 31, 213 | |||||||||||||
Unrecognized compensation expense (in thousands) | $ | 4,452 | |||||||||||
Remaining vesting phase | 3.4 years | ||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Income Taxes [Abstract] | ' | ||||||||||||
Schedule of Components of Income Taxes | ' | ||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | - | $ | - | $ | - | |||||||
State | - | - | - | ||||||||||
Total current income tax | - | - | - | ||||||||||
Deferred: | |||||||||||||
Federal | $ | 6,367 | $ | 4,219 | $ | 4,266 | |||||||
State | 503 | 360 | 354 | ||||||||||
Total deferred income tax | 6,870 | 4,579 | 4,620 | ||||||||||
Valuation allowance | - | (4,911 | ) | (4,620 | ) | ||||||||
Income tax provision (benefit) | $ | 6,870 | $ | (332 | ) | $ | - | ||||||
Schedule of Reconciliation of Income Taxes | ' | ||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Federal income tax at statutory rate | $ | 5,594 | $ | 4,009 | $ | 3,944 | |||||||
State income taxes, net of federal tax | 503 | 360 | 354 | ||||||||||
Statutory depletion | (929 | ) | - | - | |||||||||
Stock based compensation | 1,911 | - | - | ||||||||||
Other | (209 | ) | 210 | 322 | |||||||||
Change in valuation allowance | - | (4,911 | ) | (4,620 | ) | ||||||||
Income tax provision (benefit) | $ | 6,870 | $ | (332 | ) | $ | - | ||||||
Effective rate expressed as a percentage | 42 | % | 3 | % | 0 | % | |||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||||||
As of August 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carry-forward | $ | 11,485 | $ | 12,643 | |||||||||
Stock-based compensation | 515 | 4,070 | |||||||||||
Statutory depletion | 929 | - | |||||||||||
Unrealized loss on commodity derivative | 982 | - | |||||||||||
Other | 3 | 3 | |||||||||||
Gross deferred tax assets | $ | 13,914 | $ | 16,716 | |||||||||
Deferred tax liabilities: | |||||||||||||
Basis of oil and gas properties | 20,452 | 16,384 | |||||||||||
Gross deferred tax liabilities | 20,452 | 16,384 | |||||||||||
Deferred tax liability (asset), net | $ | 6,538 | $ | (332 | ) | ||||||||
Related_Party_Transactions_and1
Related Party Transactions and Commitments (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Related Party Transactions and Commitments [Abstract] | ' | ||||||||||||
Schedule of Mineral Assets Acquired From Related Party | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Consideration for certain mineral assets: | |||||||||||||
Cash payments for certain mineral assets | $ | - | $ | - | $ | 10,000 | |||||||
Value of restricted shares of common stock | - | - | 4,698 | ||||||||||
Promissory note | - | - | 5,200 | ||||||||||
Total | $ | - | $ | - | $ | 19,898 | |||||||
Subsequent settlement of amounts owing: | |||||||||||||
Repayment of promissory note | $ | - | $ | 5,200 | $ | - | |||||||
Payment of interest on promissory note | - | 142 | - | ||||||||||
Total | $ | - | $ | 5,342 | $ | - | |||||||
Schedule of Other Related Party Transactions | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Beginning balance due to PM | $ | - | $ | - | $ | 539 | |||||||
Purchase of equipment from PM | - | - | 2 | ||||||||||
Payments to PM for equipment | - | - | (541 | ) | |||||||||
Ending balance due to PM for equipment | $ | - | $ | - | $ | - | |||||||
Beginning balance due from PEM | $ | - | $ | - | $ | 868 | |||||||
Joint interest costs billed to PEM | - | - | 396 | ||||||||||
Amounts collected from PEM | - | - | (1,264 | ) | |||||||||
Ending balance due from PEM | $ | - | $ | - | $ | - | |||||||
Schedule of Rent Expense | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Rent expense | $ | 130 | $ | 120 | $ | 120 | |||||||
Schedule of Share-based Compensation Provided to Related Party | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Restricted shares of common stock | - | 188,137 | 40,000 | ||||||||||
Value of restriced shares of common stock (in thousands) | $ | - | $ | 491 | $ | 164 | |||||||
Schedule of Royalty Expense | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total Royalty Payments | $ | 304 | $ | 196 | N/A | ||||||||
Supplemental_Schedule_of_Infor1
Supplemental Schedule of Information to the Statements of Cash Flows (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Supplemental Schedule of Information to the Statements of Cash Flows [Abstract] | ' | ||||||||||||
Schedule of Supplemental Information to the Statements of Cash Flows | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
Supplemental cash flow information: | 2013 | 2012 | 2011 | ||||||||||
Interest paid | $ | 995 | $ | 74 | $ | 788 | |||||||
Income taxes paid | - | - | - | ||||||||||
Non-cash investing and financing activities: | |||||||||||||
Accrued well costs | $ | 25,491 | $ | 5,733 | $ | 4,967 | |||||||
Assets acquired in exchange for common stock | 16,684 | 1,985 | 9,938 | ||||||||||
Assets acquired in exchange for note payable | - | - | 5,200 | ||||||||||
Asset retirement costs and obligations | 1,578 | 300 | 351 | ||||||||||
Conversion of promissory notes into common stock | - | - | 15,908 | ||||||||||
Unaudited_Oil_and_Gas_Reserves1
Unaudited Oil and Gas Reserves Information (Tables) | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | |||||||||||||
Unaudited Oil and Gas Reserves Information [Abstract] | ' | ||||||||||||
Schedule of Net Ownership Interests in Estimated Quantities of Proved Developed and Undeveloped Oil and Gas Reserve Quantities and Changes During Fiscal Year | ' | ||||||||||||
Oil (Bbl) | Gas (McF) | Boe | |||||||||||
Balance, August 31, 2010 | 676,685 | 4,481,051 | 1,423,527 | ||||||||||
Revision of previous estimates | 323,704 | 611,516 | 425,623 | ||||||||||
Purchase of reserves in place | 967,302 | 8,466,714 | 2,378,421 | ||||||||||
Extensions, discoveries, and other additions | 191,931 | 1,152,708 | 384,049 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (89,917 | ) | (450,831 | ) | (165,056 | ) | |||||||
Balance, August 31, 2011 | 2,069,705 | 14,261,158 | 4,446,564 | ||||||||||
Revision of previous estimates | 429,783 | 3,298,906 | 979,601 | ||||||||||
Purchase of reserves in place | 33,328 | 706,842 | 151,135 | ||||||||||
Extensions, discoveries, and other additions | 2,788,686 | 16,288,125 | 5,503,374 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (235,691 | ) | (1,109,057 | ) | (420,534 | ) | |||||||
Balance, August 31, 2012 | 5,085,811 | 33,445,974 | 10,660,140 | ||||||||||
Revision of previous estimates | (194,236 | ) | (2,923,919 | ) | (681,556 | ) | |||||||
Purchase of reserves in place | 1,000,664 | 7,360,752 | 2,227,456 | ||||||||||
Extensions, discoveries, and other additions | 1,576,301 | 4,914,627 | 2,395,406 | ||||||||||
Sale of reserves in place | - | - | - | ||||||||||
Production | (421,265 | ) | (2,107,603 | ) | (772,532 | ) | |||||||
Balance, August 31, 2013 | 7,047,275 | 40,689,831 | 13,828,914 | ||||||||||
Proved developed and undeveloped reserves: | |||||||||||||
Developed at August 31, 2011 | 783,821 | 5,578,067 | 1,713,499 | ||||||||||
Undeveloped at August 31, 2011 | 1,285,884 | 8,683,091 | 2,733,066 | ||||||||||
Balance, August 31, 2011 | 2,069,705 | 14,261,158 | 4,446,565 | ||||||||||
Developed at August 31, 2012 | 2,823,604 | 17,380,806 | 5,720,405 | ||||||||||
Undeveloped at August 31, 2012 | 2,262,207 | 16,065,168 | 4,939,735 | ||||||||||
Balance, August 31, 2012 | 5,085,811 | 33,445,974 | 10,660,140 | ||||||||||
Developed at August 31, 2013 | 4,659,405 | 25,866,008 | 8,970,406 | ||||||||||
Undeveloped at August 31, 2013 | 2,387,870 | 14,823,823 | 4,858,507 | ||||||||||
Balance, August 31, 2013 | 7,047,275 | 40,689,831 | 13,828,913 | ||||||||||
Schedule of Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Future cash inflow | $ | 749,030 | $ | 537,462 | $ | 235,239 | |||||||
Future production costs | (146,352 | ) | (85,612 | ) | (41,278 | ) | |||||||
Future development costs | (108,290 | ) | (100,821 | ) | (40,404 | ) | |||||||
Future income tax expense | (113,545 | ) | (109,349 | ) | (30,738 | ) | |||||||
Future net cash flows | 380,843 | 241,680 | 122,819 | ||||||||||
10% annual discount for estimated timing of cash flows | (199,111 | ) | (139,175 | ) | (65,269 | ) | |||||||
Standardized measure of discounted future net cash flows | $ | 181,732 | $ | 102,505 | $ | 57,550 | |||||||
Schedule of Prices Used to Prepare Estimates of Oil and Gas Reserves | ' | ||||||||||||
Oil (Bbl) | Gas (Mcf) | ||||||||||||
August 31, 2011 (Average) | $ | 84.9 | $ | 5.07 | |||||||||
August 31, 2012 (Average) | $ | 86.68 | $ | 3.76 | |||||||||
August 31, 2013 (Average) | $ | 86.4 | $ | 4.4 | |||||||||
Schedule of Changes in the Standardized Measure for Discounted Cash Flows | ' | ||||||||||||
For the Years Ended August 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Standardized measure, beginning of year | $ | 102,505 | $ | 57,550 | $ | 13,022 | |||||||
Sale and transfers, net of production costs | (38,569 | ) | (21,321 | ) | (8,337 | ) | |||||||
Net changes in prices and production costs | (4,550 | ) | (6,023 | ) | 15,484 | ||||||||
Extensions, discoveries, and improved recovery | 70,191 | 69,073 | 13,693 | ||||||||||
Changes in estimated future development costs | (6,006 | ) | (42,578 | ) | (20,471 | ) | |||||||
Development costs incurred during the period | 5,106 | 39,739 | 16,252 | ||||||||||
Revision of quantity estimates | (14,214 | ) | 21,058 | 15,424 | |||||||||
Accretion of discount | 35,103 | 15,379 | 3,245 | ||||||||||
Net change in income taxes | (7,850 | ) | (30,832 | ) | (12,012 | ) | |||||||
Purchase of reserves in place | 40,016 | 460 | 21,250 | ||||||||||
Standardized measure, end of year | $ | 181,732 | $ | 102,505 | $ | 57,550 |
Unaudited_Quarterly_Financial_1
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Aug. 31, 2013 | |||||||||||||||||
Unaudited Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
Schedule of Unaudited Quarterly Financial Data | ' | ||||||||||||||||
For the Year Ended August 31, 2013 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Revenues | $ | 8,314 | $ | 10,921 | $ | 12,314 | $ | 14,674 | |||||||||
Expenses | 4,768 | 6,439 | 7,449 | 8,022 | |||||||||||||
Operating income | 3,546 | 4,482 | 4,865 | 6,652 | |||||||||||||
Other income (expense) | 7 | (146 | ) | 451 | (3,406 | ) | |||||||||||
Income before income taxes | 3,553 | 4,336 | 5,316 | 3,246 | |||||||||||||
Income tax provision (4) | 1,315 | 1,604 | 1,701 | 2,250 | |||||||||||||
Net income | $ | 2,238 | $ | 2,732 | $ | 3,615 | $ | 996 | |||||||||
Net income per common share: (1) | |||||||||||||||||
Basic | $ | 0.04 | $ | 0.05 | $ | 0.07 | $ | 0.02 | |||||||||
Diluted | $ | 0.04 | $ | 0.05 | $ | 0.06 | $ | 0.01 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 51,661,704 | 54,900,326 | 55,238,098 | 66,283,325 | |||||||||||||
Diluted | 53,616,182 | 56,481,752 | 58,918,586 | 70,176,105 | |||||||||||||
For the Year Ended August 31, 2012 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Revenues | $ | 4,479 | $ | 6,219 | $ | 7,522 | $ | 6,750 | |||||||||
Expenses | 2,860 | 3,344 | 3,676 | 3,336 | |||||||||||||
Operating income | 1,619 | 2,875 | 3,846 | 3,414 | |||||||||||||
Other income (expense) | 8 | 3 | 17 | 10 | |||||||||||||
Income before income taxes | 1,627 | 2,878 | 3,863 | 3,424 | |||||||||||||
Income tax provision (benefit) (2, 3) | - | (3,241 | ) | 1,432 | 1,477 | ||||||||||||
Net income | $ | 1,627 | $ | 6,119 | $ | 2,431 | $ | 1,947 | |||||||||
Net income per common share: (1) | |||||||||||||||||
Basic | $ | 0.05 | $ | 0.13 | $ | 0.05 | $ | 0.04 | |||||||||
Diluted | $ | 0.04 | $ | 0.12 | $ | 0.05 | $ | 0.04 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Basic | 36,098,212 | 47,445,178 | 51,292,810 | 51,409,340 | |||||||||||||
Diluted | 37,845,212 | 49,229,042 | 53,174,792 | 53,072,619 | |||||||||||||
1 | The sum of net income per common share for the four quarters may not agree with the annual amount reported because the number used as the denominator for each quarterly computation is based on the weighted-average number of shares outstanding during that quarter whereas the annual computation is based upon an average for the entire year. | ||||||||||||||||
2 | No income tax was recognized during the three months ended November 30, 2011 as the provision for tax at the effective rate was offset by a change in the valuation allowance. | ||||||||||||||||
3 | For the three months ended February 29, 2012, the entire valuation allowance of $4.9 million was released and a net deferred tax benefit of $3.2 million was recorded. | ||||||||||||||||
4 | For the three months ended August 31, 2013, income taxes were provided at a higher than expected rate due to a downward adjustment in the deferred tax asset related to the expiration of underlying stock options. | ||||||||||||||||
Organization_and_Summary_of_Si3
Organization and Summary of Significant Accounting Policies (Schedule of Capitalized Overhead) (Details) (USD $) | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
In Thousands, unless otherwise specified | |||
Organization and Summary of Significant Accounting Policies [Abstract] | ' | ' | ' |
Capitalized overhead | $637 | $345 | $206 |
Organization_and_Summary_of_Si4
Organization and Summary of Significant Accounting Policies (Schedule of Derivative Conversion Liability) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Organization and Summary of Significant Accounting Policies [Abstract] | ' | ' | ' |
Non-cash expense recognized related to the change in the fair value of derivative conversion liabilities | ' | ' | $10,229 |
Derivative conversion liabilities recognized in additional paid-in-capital | ' | ' | $19,554 |
Organization_and_Summary_of_Si5
Organization and Summary of Significant Accounting Policies (Schedule of Major Customers) (Details) | 12 Months Ended | |||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | ||
Company A [Member] | Oil and Gas Revenues [Member] | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | |
Risk percentage | 50.00% | 68.00% | 75.00% | |
Company A [Member] | Accounts Receivable [Member] | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | |
Risk percentage | 24.00% | 35.00% | 31.00% | |
Company B [Member] | Oil and Gas Revenues [Member] | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | |
Risk percentage | 15.00% | 11.00% | 21.00% | |
Company B [Member] | Accounts Receivable [Member] | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | |
Risk percentage | 23.00% | 30.00% | 31.00% | |
Company C [Member] | Accounts Receivable [Member] | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | |
Risk percentage | 12.00% | 0.00% | [1] | 13.00% |
[1] | less than 10% |
Organization_and_Summary_of_Si6
Organization and Summary of Significant Accounting Policies (Schedule of Earnings Per Share) (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-12 | Feb. 29, 2012 | Nov. 30, 2011 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | |
Weighted average shares outstanding: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average shares outstanding - basic | 66,283,325 | 55,238,098 | 54,900,326 | 51,661,704 | 51,409,340 | 51,292,810 | 47,445,178 | 36,098,212 | 57,089,362 | 46,587,558 | 26,009,283 |
Potentially dilutive common shares from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options | ' | ' | ' | ' | ' | ' | ' | ' | 1,881,682 | 1,380,861 | ' |
Warrants | ' | ' | ' | ' | ' | ' | ' | ' | 117,717 | 391,486 | ' |
Weighted-average shares outstanding - diluted | 70,176,105 | 58,918,586 | 56,481,752 | 53,616,182 | 53,072,619 | 53,174,792 | 49,229,042 | 37,845,212 | 59,088,761 | 48,359,905 | 26,009,283 |
Organization_and_Summary_of_Si7
Organization and Summary of Significant Accounting Policies (Schedule of Potentially Dilutive Securities) (Details) | 12 Months Ended | ||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Potentially dilutive securities | 9,170,000 | 16,593,000 | 19,576,067 |
Stock options [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Potentially dilutive securities | 670,000 | 2,495,000 | 4,645,000 |
Warrants [Member] | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Potentially dilutive securities | 8,500,000 | 14,098,000 | 14,931,067 |
Property_and_Equipment_Schedul
Property and Equipment (Schedule of Capitalized Costs) (Details) (USD $) | Aug. 31, 2013 | Aug. 31, 2012 |
In Thousands, unless otherwise specified | ||
Unevaluated costs, not subject to amortization: | ' | ' |
Unevaluated oil and gas properties | $64,715 | $32,484 |
Evaluated costs: | ' | ' |
Producing and non-producing | 155,755 | 69,667 |
Total capitalized costs | 220,470 | 102,151 |
Less, accumulated depletion | -22,776 | -9,731 |
Oil and gas properties, net | 197,694 | 92,420 |
Other property and equipment: | ' | ' |
Other property and equipment, gross | 544 | 436 |
Less, accumulated depreciation | -273 | -154 |
Other property and equipment, net | 271 | 282 |
Property and equipment, net | 197,965 | 92,702 |
Vehicles [Member] | ' | ' |
Other property and equipment: | ' | ' |
Other property and equipment, gross | ' | 163,904 |
Leasehold Improvements [Member] | ' | ' |
Other property and equipment: | ' | ' |
Other property and equipment, gross | ' | 71,651 |
Office Equipment [Member] | ' | ' |
Other property and equipment: | ' | ' |
Other property and equipment, gross | ' | 156,893 |
Land [Member] | ' | ' |
Other property and equipment: | ' | ' |
Other property and equipment, gross | ' | 43,750 |
Lease acquisition and other costs [Member] | ' | ' |
Unevaluated costs, not subject to amortization: | ' | ' |
Unevaluated oil and gas properties | 38,826 | 27,070 |
Wells in progress [Member] | ' | ' |
Unevaluated costs, not subject to amortization: | ' | ' |
Unevaluated oil and gas properties | $25,889 | $5,414 |
Property_and_Equipment_Schedul1
Property and Equipment (Schedule of Costs Incurred) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Acquisition of property: | ' | ' | ' |
Unproved | $12,295 | $9,145 | $9,198 |
Proved | 43,143 | 459 | 21,251 |
Exploration costs | ' | ' | ' |
Development costs | 61,128 | 39,739 | 14,997 |
Asset retirement obligation | 1,578 | 300 | 351 |
Total costs Incurred | $118,144 | $49,643 | $45,797 |
Property_and_Equipment_Schedul2
Property and Equipment (Schedule of Capitalized Costs Excluded from Amortization) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total unevaluated costs | $37,646 | $9,636 | $16,585 | $848 |
Unevaluated costs, not subject to amortization | 64,715 | 32,484 | ' | ' |
Lease acquisition and other costs [Member] | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total unevaluated costs | 11,757 | 9,636 | 16,585 | 848 |
Unevaluated costs, not subject to amortization | 38,826 | 27,070 | ' | ' |
Wells in progress [Member] | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Total unevaluated costs | 25,889 | ' | ' | ' |
Unevaluated costs, not subject to amortization | $25,889 | $5,414 | ' | ' |
Acquisition_Narrative_Details
Acquisition (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 05, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
acre | ||||
Acquisition [Abstract] | ' | ' | ' | ' |
Number of wells | 36 | ' | ' | ' |
Mineral acres, gross | 3,933 | ' | ' | ' |
Mineral acres, net | 3,196 | ' | ' | ' |
Shares issued for Orr Energy acquisition, shares | 3,128,422 | 3,128,422 | ' | ' |
Shares issued for Orr Energy acquistion | $13,515 | $13,518 | ' | ' |
Cash | 29,012 | ' | ' | ' |
Transaction costs | $109 | ' | ' | ' |
Acquisition_Schedule_of_Fair_V
Acquisition (Schedule of Fair Value of Acquisition) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 05, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | |
Purchase Price | ' | ' | ' | ' | |
Cash | $29,012 | ' | ' | ' | |
Synergy Resources Corp. Common Stock | 13,515 | [1] | ' | ' | ' |
Total consideration given | 42,527 | ' | ' | ' | |
Allocation of Purchase Price | ' | ' | ' | ' | |
Proved oil and gas properties | 43,143 | ' | ' | ' | |
Unproved oil and gas properties | 466 | ' | ' | ' | |
Total fair value of oil and gas properties acquired | 43,609 | ' | ' | ' | |
Working capital | -842 | ' | ' | ' | |
Asset retirement obligation | -240 | ' | ' | ' | |
Fair value of net assets acquired | 42,527 | ' | ' | ' | |
Working capital acquired was estimated as follows: | ' | ' | ' | ' | |
Accounts receivable | 521 | ' | ' | ' | |
Accrued liabilities and expenses | -1,363 | ' | ' | ' | |
Total working capital | ($842) | ' | ' | ' | |
Shares issued for Orr Energy acquisition, shares | 3,128,422 | 3,128,422 | ' | ' | |
Closing stock price | $4.32 | ' | ' | ' | |
[1] | The fair value of the consideration attributed to the Common Stock under ASC 805 was based on the Company's closing stock price on the measurement date of December 5, 2012. (3,128,422 shares at $4.32 per share) |
Acquisition_Schedule_of_Pro_Fo
Acquisition (Schedule of Pro Forma Results) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 |
Acquisition [Abstract] | ' | ' |
Oil and Gas Revenues | $47,760 | $32,188 |
Net income | $10,118 | $14,870 |
Earnings per common share | ' | ' |
Basic | $0.17 | $0.30 |
Diluted | $0.17 | $0.29 |
Depletion_depreciation_and_amo2
Depletion, depreciation and amortization ("DDA") (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Depletion, depreciation and amortization ("DDA") [Abstract] | ' | ' | ' |
Depletion | $13,046 | $5,838 | $2,743 |
Depreciation and amortization | 290 | 172 | 95 |
Total DDA expense | $13,336 | $6,010 | $2,838 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Nov. 01, 2012 |
Beginning asset retirement obligation | $1,027 | $644 | $1,026,796 |
Liabilities incurred | 376 | 300 | ' |
Liabilities assumed | 240 | ' | ' |
Liabilities settled | ' | ' | ' |
Accretion expense | 172 | 83 | ' |
Revisions in previous estimates | 962 | ' | ' |
Ending asset retirement obligation | $2,777 | $1,027 | $1,026,796 |
Minimum [Member] | ' | ' | ' |
Inflation rate | 3.90% | 3.90% | ' |
Estimated asset life | '24 years | '24 years | ' |
Credit adjusted risk free interest rate | 8.00% | 11.20% | ' |
Maximum [Member] | ' | ' | ' |
Inflation rate | 4.00% | 4.00% | ' |
Estimated asset life | '40 years | '27 years 7 months 6 days | ' |
Credit adjusted risk free interest rate | 11.20% | 11.70% | ' |
Revolving_Credit_Facility_Deta
Revolving Credit Facility (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Aug. 31, 2013 | Feb. 28, 2013 |
Line of Credit Facility [Line Items] | ' | ' |
Total borrowing capacity | $150,000 | ' |
Current limited borrowing capacity on revolving credit facility | $38,000 | $75,000 |
Credit facility, expiration date | 28-Nov-16 | ' |
Minimum adjusted current ratio | 1 | ' |
Minimum EBITDAX times interest and fees | 3.5 | ' |
Maximum funded debt to EBITDAX | 3.5 | ' |
Maximum funded debt to total capitalization | 0.5 | ' |
Minimum hedge percentage of scheduled production for a rolling 24 months, as required by revolving credit facility covenants | 45.00% | ' |
Maximum hedge percentage of scheduled production for a rolling 24 months, as required by revolving credit facility covenants | 80.00% | ' |
Revolving credit facility, additional rate over LIBOR | 2.50% | ' |
Minimum annual interest rate | 3.20% | ' |
Period end prime rate | 2.70% | ' |
Minimum [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Revolving credit facility, additional rate over Prime | 0.00% | ' |
Revolving credit facility, additional rate over LIBOR | 2.50% | ' |
Maximum [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Revolving credit facility, additional rate over Prime | 1.00% | ' |
Revolving credit facility, additional rate over LIBOR | 3.25% | ' |
Commodity_Derivative_Instrumen2
Commodity Derivative Instruments (Schedule of Commodity Derivative Contracts) (Details) | 12 Months Ended | |
Aug. 31, 2013 | ||
bbl | ||
Swap [Member] | 2013 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 32,014 | |
Strike/Swap Price ($/Bbl) | 95.13 | |
Swap [Member] | 2014 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 23,840 | |
Strike/Swap Price ($/Bbl) | 92.35 | |
Contract One [Member] | Collar [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 3,014 | |
Term, minimum | 1-Sep-13 | |
Term, maximum | 31-Dec-13 | |
Contract One [Member] | Collar [Member] | Minimum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 87 | |
Contract One [Member] | Collar [Member] | Maximum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 102.5 | |
Contract One [Member] | Swap [Member] | 2013 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 3,014 | |
Strike/Swap Price ($/Bbl) | 91.7 | |
Term, minimum | 1-Sep-13 | |
Term, maximum | 31-Dec-13 | |
Contract One [Member] | Swap [Member] | 2014 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 1,840 | |
Strike/Swap Price ($/Bbl) | 90.8 | |
Term, minimum | 1-Jan-14 | |
Term, maximum | 31-Dec-14 | |
Contract Two [Member] | Collar [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 1,840 | |
Term, minimum | 1-Jan-14 | |
Term, maximum | 31-Dec-14 | |
Contract Two [Member] | Collar [Member] | Minimum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 85 | |
Contract Two [Member] | Collar [Member] | Maximum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 98.5 | |
Contract Two [Member] | Swap [Member] | 2013 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 6,000 | |
Strike/Swap Price ($/Bbl) | 96.35 | |
Term, minimum | 1-Sep-13 | [1] |
Term, maximum | 31-Dec-13 | [1] |
Contract Two [Member] | Swap [Member] | 2014 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 2,000 | |
Strike/Swap Price ($/Bbl) | 90.11 | |
Term, minimum | 1-Jan-14 | |
Term, maximum | 31-Dec-14 | |
Contract Three [Member] | Collar [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 7,000 | |
Term, minimum | 1-Jan-15 | |
Term, maximum | 30-Jun-15 | |
Contract Three [Member] | Collar [Member] | Minimum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 80 | |
Contract Three [Member] | Collar [Member] | Maximum [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Strike/Swap Price ($/Bbl) | 92.5 | |
Contract Three [Member] | Swap [Member] | 2013 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 8,000 | |
Strike/Swap Price ($/Bbl) | 94.45 | |
Term, minimum | 1-Sep-13 | |
Term, maximum | 31-Dec-13 | |
Contract Three [Member] | Swap [Member] | 2014 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 5,000 | |
Strike/Swap Price ($/Bbl) | 90.5 | |
Term, minimum | 1-Jan-14 | |
Term, maximum | 31-Dec-14 | |
Contract Four [Member] | Swap [Member] | 2013 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 15,000 | |
Strike/Swap Price ($/Bbl) | 98 | |
Term, minimum | 1-Sep-13 | |
Term, maximum | 31-Dec-13 | |
Contract Four [Member] | Swap [Member] | 2014 [Member] | ' | |
Derivatives, Fair Value [Line Items] | ' | |
Quantity (Bbl/month) | 15,000 | |
Strike/Swap Price ($/Bbl) | 98 | |
Term, minimum | 1-Jan-14 | |
Term, maximum | 28-Feb-14 | |
[1] | In connection with entering into these swaps with premium hedged prices, the counterparty has the right, but not the obligation to extend the swap to January 1, 2014 through December 31, 2014 at the current strike price and quantity. This option expires on December 31, 2013. |
Commodity_Derivative_Instrumen3
Commodity Derivative Instruments (Schedule of Fair Value of Derivatives) (Details) (Commodity Contract [Member], USD $) | Aug. 31, 2013 | Aug. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Commodity derivative liability | $2,315 | ' |
Noncurrent Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Commodity derivative liability | $334 | ' |
Commodity_Derivative_Instrumen4
Commodity Derivative Instruments (Schedule of Gain (Loss) Recognized in Statements of Operations) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Commodity Derivative Instruments [Abstract] | ' | ' | ' |
Unrealized loss on commodity derivatives | $2,649 | ' | ' |
Realized loss on commodity derivatives | 395 | ' | ' |
Total loss | $3,044 | ' | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring [Member], USD $) | Aug. 31, 2013 | Aug. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financial Assets: | ' | ' |
Commodity derivative asset | ' | ' |
Financial Liabilities: | ' | ' |
Commodity derivative liability | 2,649 | ' |
Level 1 [Member] | ' | ' |
Financial Assets: | ' | ' |
Commodity derivative asset | ' | ' |
Financial Liabilities: | ' | ' |
Commodity derivative liability | ' | ' |
Level 2 [Member] | ' | ' |
Financial Assets: | ' | ' |
Commodity derivative asset | ' | ' |
Financial Liabilities: | ' | ' |
Commodity derivative liability | 2,649 | ' |
Level 3 [Member] | ' | ' |
Financial Assets: | ' | ' |
Commodity derivative asset | ' | ' |
Financial Liabilities: | ' | ' |
Commodity derivative liability | ' | ' |
Interest_Expense_Details
Interest Expense (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 |
Interest Expense [Abstract] | ' | ' | ' | ' |
Revolving bank credit facility at a variable rate | $1,067 | $108 | $41 | ' |
Convertible promissory notes at 8% | ' | ' | 590 | ' |
Related party note payable at 5.25% | ' | 68 | 74 | ' |
Accretion of debt discount | ' | ' | 2,664 | ' |
Amortization of debt issuance costs | 160 | 32 | 1,588 | ' |
Less, interest capitalized | -1,130 | -208 | -710 | ' |
Interest expense, net | $97 | ' | $4,247 | ' |
Interest rate | 8.00% | ' | ' | 8.00% |
Related party note, interest rate | 5.25% | ' | ' | ' |
Shareholders_Equity_Common_Sto
Shareholders' Equity (Common Stock Transactions) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 05, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 |
Shareholders' Equity [Abstract] | ' | ' | ' | ' | ' |
Preferred stock, shares authorized | ' | 10,000,000 | 10,000,000 | 10,000,000 | ' |
Preferred stock, par value per share | ' | $0.01 | $0.01 | $0.01 | ' |
Preferred stock, shares issued | ' | 0 | 0 | 0 | ' |
Preferred stock, shares outstanding | ' | 0 | 0 | 0 | ' |
Common stock, shares authorized | ' | 100,000,000 | 100,000,000 | 100,000,000 | ' |
Common stock, par value per share | ' | $0.00 | $0.00 | $0.00 | ' |
Common stock, shares issued | ' | 70,587,723 | 51,409,340 | 36,098,212 | ' |
Common stock, shares outstanding | ' | 70,587,723 | 51,409,340 | 36,098,212 | 13,510,981 |
Sale of common stock | ' | ' | ' | ' | ' |
Number of shares acquired | ' | 13,225,000 | 14,363,363 | 9,000,000 | ' |
Offering price per common share | ' | $6.25 | $2.75 | $2 | ' |
Net proceeds | ' | $78,243 | $37,422 | $16,691 | ' |
Common stock issued for acquisition of mineral interests | ' | ' | ' | ' | ' |
Number of common shares issued for mineral property leases | ' | 687,122 | 669,765 | 1,864,838 | ' |
Number of common shares issued for Orr Energy acquisition | 3,128,422 | 3,128,422 | ' | ' | ' |
Total common shares issued | ' | 3,815,544 | 669,765 | 1,864,838 | ' |
Average price per common share | ' | $4.37 | $3.12 | $3.04 | ' |
Aggregate value of shares issues | ' | $16,684 | $2,090 | $5,670 | ' |
Shareholders_Equity_Common_Sto1
Shareholders' Equity (Common Stock Warrants) (Details) (USD $) | 12 Months Ended | ||||||||||||||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 | Aug. 31, 2009 | Aug. 31, 2009 | Aug. 31, 2013 | Aug. 31, 2010 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 | Aug. 31, 2009 | Aug. 31, 2013 | Aug. 31, 2012 | |
Series A [Member] | Series B [Member] | Series C [Member] | Series C [Member] | Series D [Member] | Series D [Member] | Series D [Member] | Series D [Member] | Sales Agent Warrants [Member] | Investor Relation Warrants [Member] | Investor Relation Warrants [Member] | |||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise Price | ' | ' | ' | ' | 6,000 | 10,000 | 6,000 | 6,000 | 1.6 | ' | ' | 1,600 | 1,800 | 2,690 | 2,690 |
Number of Shares | 8,666,802 | ' | ' | ' | ' | ' | 8,500,000 | ' | 141,802 | ' | ' | ' | ' | 25,000 | ' |
Remaining Contractual Life (in years) | ' | ' | ' | ' | ' | ' | '1 year 3 months 18 days | ' | '1 year 3 months 18 days | ' | ' | ' | ' | '2 years 3 months 18 days | ' |
Exercise Price times number of shares | $51,294,133,000 | ' | ' | ' | ' | ' | $51,000,000,000 | $50,000,000 | $226,883,000 | ' | ' | ' | ' | $67,250,000 | ' |
Outstanding | 15,031,067 | 14,931,067 | 15,286,466 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' |
Exercised | 1,216,265 | ' | 355,399 | ' | ' | ' | 500,000 | ' | 627,799 | ' | 355,399 | ' | ' | 25,000 | ' |
Forfeited/Expired | 5,148,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' |
Outstanding | 8,666,802 | 15,031,067 | 14,931,067 | 15,286,466 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price, outstanding | $6.02 | $6.02 | $5.92 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price, granted | ' | $2.69 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price, exercised | $3.44 | $0 | $1.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price, forfeited/expired | $6.74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price, outstanding | $5.92 | $6.02 | $6.02 | $5.92 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants issued | ' | ' | ' | ' | 4,098,000 | 1,000,000 | ' | 9,000,000 | ' | ' | ' | 1,125,000 | 31,733 | ' | 100,000 |
Number of shares of common stock per warrant | ' | ' | ' | ' | 1 | 1 | ' | 1 | ' | ' | ' | 1 | 2 | ' | 1 |
Face value of debt instrument | ' | ' | ' | 100,000,000 | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' |
Amount of note converted | ' | ' | $15,908,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of notes payable, shares | ' | ' | 9,942,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued in payment of accrued interest | ' | ' | 36,876 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt conversion, price per share | ' | ' | $1.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | 8.00% | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units sold | ' | ' | ' | 180 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Stock-Based Compensation [Abstract] | ' | ' | ' |
Term | '10 years | '10 years | '10 years |
Assumptions used in valuing stock options: | ' | ' | ' |
Expected term | '6 years 2 months 12 days | '6 years 5 months | ' |
Expected volatility | 77.00% | ' | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Forfeiture rate | 0.00% | ' | 0.00% |
Stock-based compensation expense | $1,362 | $473 | $627 |
Fair value | 4,179 | 519 | 990 |
Summary of activity for stock options: | ' | ' | ' |
Outstanding | 4,915,000 | 4,645,000 | 4,220,000 |
Granted | 1,025,000 | 275,000 | 425,000 |
Exercised | -2,120,000 | ' | ' |
Forfeited | -2,000,000 | -5,000 | ' |
Outstanding | 1,820,000 | 4,915,000 | 4,645,000 |
Outstanding, weighted average exercise price | $5.09 | $5.21 | $5.36 |
Granted, weighted-average exercise price | $6.05 | $2.96 | $3.79 |
Exercised, weighted-average exercise price | $1.10 | $0 | $0 |
Forfeited, weighted average exercise price | $10 | $3.40 | ' |
Outstanding, weighted average exercise price | $4.88 | $5.09 | $5.21 |
Weighted average remaining contractual life | '8 years 8 months 12 days | ' | ' |
Aggregate intrinsic value | 8,160 | ' | ' |
Vested Options: | ' | ' | ' |
Number of shares | 373,000 | ' | ' |
Weighted average remaining contractual life | '7 years 8 months 12 days | ' | ' |
Weighted average exercise price | $3.71 | ' | ' |
Aggregate intrinsic value | 2,107 | ' | ' |
Unrecognized compensation expense | 4,452 | ' | ' |
Remaining vesting phase | '3 years 4 months 24 days | ' | ' |
Number of shares acquired | 2,000,000 | ' | ' |
Shares withheld, shares | 1,026,043 | ' | ' |
Shares withheld, value | 8,700 | ' | ' |
Minimum payroll taxes | 6,700 | ' | ' |
Non Qualified Plan [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number of shares authorized | 5,000,000 | ' | ' |
Incentive Stock Option And Stock Bonus Plan [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number of shares authorized | 2,000,000 | ' | ' |
Employee Stock Option [Member] | ' | ' | ' |
Assumptions used in valuing stock options: | ' | ' | ' |
Stock-based compensation expense | 1,039 | 443 | 197 |
Restricted Stock [Member] | ' | ' | ' |
Assumptions used in valuing stock options: | ' | ' | ' |
Stock-based compensation expense | 277 | 17 | 430 |
Warrant [Member] | ' | ' | ' |
Assumptions used in valuing stock options: | ' | ' | ' |
Stock-based compensation expense | $46 | $13 | ' |
Minimum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Vesting period | '3 years | '4 years | '4 years |
Assumptions used in valuing stock options: | ' | ' | ' |
Expected term | ' | ' | '6 years |
Expected volatility | ' | 56.70% | 53.20% |
Risk-free interest rate | 0.89% | 1.01% | 1.48% |
Forfeiture rate | ' | 0.00% | ' |
Maximum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Vesting period | '5 years | '5 years | '5 years |
Assumptions used in valuing stock options: | ' | ' | ' |
Expected term | ' | ' | '6 years 5 months |
Expected volatility | ' | 69.40% | 69.40% |
Risk-free interest rate | 2.11% | 1.42% | 2.63% |
Forfeiture rate | ' | 0.70% | ' |
Income_Taxes_Schedule_of_Compo
Income Taxes (Schedule of Components of Income Taxes) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-12 | Feb. 29, 2012 | Nov. 30, 2011 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | ||||||||
Current: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Federal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
State | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Total current income tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Deferred: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Federal | ' | ' | ' | ' | ' | ' | ' | ' | 6,367 | 4,219 | 4,266 | ||||||||
State | ' | ' | ' | ' | ' | ' | ' | ' | 503 | 360 | 354 | ||||||||
Total deferred income tax | ' | ' | ' | ' | ' | ' | ' | ' | 6,870 | 4,579 | 4,620 | ||||||||
Valuation allowance | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,911 | -4,620 | ||||||||
Income tax provision (benefit) | $2,250 | [1] | $1,701 | [1] | $1,604 | [1] | $1,315 | [1] | $1,477 | [2],[3] | $1,432 | [2],[3] | ($3,241) | [2],[3] | ' | [2],[3] | $6,870 | ($332) | ' |
[1] | For the three months ended August 31, 2013, income taxes were provided at a higher than expected rate due to a downward adjustment in the deferred tax asset related to the expiration of underlying stock options. | ||||||||||||||||||
[2] | No income tax was recognized during the three months ended November 30, 2011 as the provision for tax at the effective rate was offset by a change in the valuation allowance. | ||||||||||||||||||
[3] | For the three months ended February 29, 2012, the entire valuation allowance of $4.9 million was released and a net deferred tax benefit of $3.2 million was recorded. |
Income_Taxes_Schedule_of_Recon
Income Taxes (Schedule of Reconciliation of Income Taxes) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, unless otherwise specified | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-12 | Feb. 29, 2012 | Nov. 30, 2011 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | ||||||||
Income Taxes [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Federal income tax at statutory rate | ' | ' | ' | ' | ' | ' | ' | ' | $5,594 | $4,009 | $3,944 | ||||||||
State income taxes, net of federal benefit | ' | ' | ' | ' | ' | ' | ' | ' | 503 | 360 | 354 | ||||||||
Statutory depletion | ' | ' | ' | ' | ' | ' | ' | ' | -929 | ' | ' | ||||||||
Stock based compensation | ' | ' | ' | ' | ' | ' | ' | ' | 1,911 | ' | ' | ||||||||
Other | ' | ' | ' | ' | ' | ' | ' | ' | -209 | 210 | 322 | ||||||||
Change in valuation allowance | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4,911 | -4,620 | ||||||||
Income tax provision (benefit) | $2,250 | [1] | $1,701 | [1] | $1,604 | [1] | $1,315 | [1] | $1,477 | [2],[3] | $1,432 | [2],[3] | ($3,241) | [2],[3] | ' | [2],[3] | $6,870 | ($332) | ' |
Effective rate expressed as a percentage | ' | ' | ' | ' | ' | ' | ' | ' | 42.00% | 3.00% | 0.00% | ||||||||
[1] | For the three months ended August 31, 2013, income taxes were provided at a higher than expected rate due to a downward adjustment in the deferred tax asset related to the expiration of underlying stock options. | ||||||||||||||||||
[2] | No income tax was recognized during the three months ended November 30, 2011 as the provision for tax at the effective rate was offset by a change in the valuation allowance. | ||||||||||||||||||
[3] | For the three months ended February 29, 2012, the entire valuation allowance of $4.9 million was released and a net deferred tax benefit of $3.2 million was recorded. |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Aug. 31, 2013 | Aug. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net operating loss carry-forward | $11,485 | $12,643 |
Stock-based compensation | 515 | 4,070 |
Statutory depletion | 929 | ' |
Unrealized loss on commodity derivative | 982 | ' |
Other | 3 | 3 |
Gross deferred tax assets | 13,914 | 16,716 |
Deferred tax liabilities: | ' | ' |
Basis of oil and gas properties | 20,452 | 16,384 |
Gross deferred tax liabilities | 20,452 | 16,384 |
Deferred tax liability (asset), net | $6,538 | ($332) |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Net operating loss | $41,300 | ' | ' |
Net operating loss carryforwards | 31,000 | ' | ' |
Compensation expense | 10,300 | ' | ' |
Change in valuation allowance | ' | ($4,911) | ($4,620) |
Minimum [Member] | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Net operating loss carryforwards, expiration date | 31-Dec-31 | ' | ' |
Maximum [Member] | ' | ' | ' |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Net operating loss carryforwards, expiration date | 31-Dec-33 | ' | ' |
Related_Party_Transactions_and2
Related Party Transactions and Commitments (Details) (USD $) | 12 Months Ended | |||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2010 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Cash payments for certain mineral assets | $80,469,000 | $46,751,000 | $30,247,000 | ' |
Repayment of promissory note | ' | 5,200,000 | ' | ' |
Payment of interest on promissory note | ' | 68,000 | 74,000 | ' |
Joint interest billing | 4,700,000 | 3,268,000 | ' | ' |
Petroleum Exploration and Management, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Cash payments for certain mineral assets | ' | ' | 10,000,000 | ' |
Value of restricted shares of common stock | ' | ' | 4,698,000 | ' |
Promissory note | ' | ' | 5,200,000 | ' |
Repayment of promissory note | ' | 5,200,000 | ' | ' |
Payment of interest on promissory note | ' | 142,000 | ' | ' |
Payments to related party | ' | 5,342,000 | ' | ' |
Balance due to related party | ' | ' | 19,898,000 | 868,000 |
Joint interest billing | ' | ' | 396,000 | ' |
Amounts collected from related party | ' | ' | -1,264,000 | ' |
Petroleum Management, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Purchase of equipment from related party | ' | ' | 2,000 | ' |
Payments to related party | ' | ' | -541,000 | ' |
Balance due to related party | ' | ' | ' | 539,000 |
HS Land & Cattle, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Rent expense | 130,000 | 120,000 | 120,000 | ' |
Petroleum Management, LLC and Petroleum Exploration and Management, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Cash payments for certain mineral assets | ' | ' | 1,017,435 | ' |
Board of Directors Member [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Restricted shares of common stock | ' | 188,137 | 40,000 | ' |
Value of restricted shares of common stock | ' | 491,000 | 164,000 | ' |
Royalty expense | $304,000 | $196,000 | ' | ' |
Other_Commitments_and_Continge1
Other Commitments and Contingencies (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Jul. 18, 2013 | Aug. 31, 2013 |
Other Commitments and Contingencies [Abstract] | ' | ' | ' |
Number of new wells under commitment | 13 | 25 | ' |
Expected future costs | $5,200 | $25,600 | $19,900 |
Accrued costs | ' | ' | $5,700 |
Potential new wells under commitment | 54 | ' | ' |
Supplemental_Schedule_of_Infor2
Supplemental Schedule of Information to the Statements of Cash Flows (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Supplemental cash flow information: | ' | ' | ' |
Interest paid | $995 | $74 | $788 |
Income taxes paid | ' | ' | ' |
Non-cash investing and financing activities: | ' | ' | ' |
Accrued well costs | 25,491 | 5,733 | 4,967 |
Assets acquired in exchange for common stock | 16,684 | 1,985 | 9,938 |
Assets acquired in exchange for note payable | ' | ' | 5,200 |
Asset retirement costs and obligations | 1,578 | 300 | 351 |
Conversion of promissory notes into common stock | ' | ' | $15,908 |
Unaudited_Oil_and_Gas_Reserves2
Unaudited Oil and Gas Reserves Information (Schedule of Net Ownership Interests in Estimated Quantities of Proved Developed and Undeveloped Oil and Gas Reserve Quantities and Changes During Fiscal Year) (Details) | 12 Months Ended | ||
Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | |
bbl | bbl | bbl | |
Oil (Bbl) [Member] | ' | ' | ' |
Proved developed and undeveloped reserves: | ' | ' | ' |
Balance | 5,085,811 | 2,069,705 | 676,685 |
Revisions of previous estimates | -194,236 | 429,783 | 323,704 |
Purchase of reserves in place | 1,000,664 | 33,328 | 967,302 |
Extensions, discoveries, and other additions | 1,576,301 | 2,788,686 | 191,931 |
Sale of reserves in place | ' | ' | ' |
Production | -421,265 | -235,691 | -89,917 |
Balance | 7,047,275 | 5,085,811 | 2,069,705 |
Proved developed reserves: | ' | ' | ' |
Proved developed reserves | 4,659,405 | 2,823,604 | 783,821 |
Proved undeveloped reserves: | ' | ' | ' |
Proved undeveloped reserves | 2,387,870 | 2,262,207 | 1,285,884 |
Gas (Mcf) [Member] | ' | ' | ' |
Proved developed and undeveloped reserves: | ' | ' | ' |
Balance | 33,445,974 | 14,261,158 | 4,481,051 |
Revisions of previous estimates | -2,923,919 | 3,298,906 | 611,516 |
Purchase of reserves in place | 7,360,752 | 706,842 | 8,466,714 |
Extensions, discoveries, and other additions | 4,914,627 | 16,288,125 | 1,152,708 |
Sale of reserves in place | ' | ' | ' |
Production | -2,107,603 | -1,109,057 | -450,831 |
Balance | 40,689,831 | 33,445,974 | 14,261,158 |
Proved developed reserves: | ' | ' | ' |
Proved developed reserves | 25,866,008 | 17,380,806 | 5,578,067 |
Proved undeveloped reserves: | ' | ' | ' |
Proved undeveloped reserves | 14,823,823 | 16,065,168 | 8,683,091 |
Boe [Member] | ' | ' | ' |
Proved developed and undeveloped reserves: | ' | ' | ' |
Balance (Boe) | 10,660,140 | 4,446,564 | 1,423,527 |
Revisions of previous estimates (Boe) | -681,556 | 979,601 | 425,623 |
Purchase of reserves in place (Boe) | 2,227,456 | 151,135 | 2,378,421 |
Extensions, discoveries, and other additions (Boe) | 2,395,406 | 5,503,374 | 384,049 |
Sale of reserves in place | ' | ' | ' |
Sales of reserves in place (Boe) | ' | ' | ' |
Production (Boe) | -772,532 | -420,534 | -165,056 |
Balance (Boe) | 13,828,914 | 10,660,140 | 4,446,564 |
Proved developed reserves: | ' | ' | ' |
Proved developed reserves (Boe) | 8,970,406 | 5,720,405 | 1,713,499 |
Proved undeveloped reserves: | ' | ' | ' |
Proved undeveloped reserves (Boe) | 4,858,507 | 4,939,735 | 2,733,066 |
Unaudited_Oil_and_Gas_Reserves3
Unaudited Oil and Gas Reserves Information (Schedule of Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Unaudited Oil and Gas Reserves Information [Abstract] | ' | ' | ' |
Future cash inflows | $749,030 | $537,462 | $235,239 |
Future production costs | -146,352 | -85,612 | -41,278 |
Future development costs | -108,290 | -100,821 | -40,404 |
Future income tax expense | -113,545 | -109,349 | -30,738 |
Future net cash flows | 380,843 | 241,680 | 122,819 |
10% annual discount for estimated timing of cash flows | -199,111 | -139,175 | -65,269 |
Standardized measure of discounted future net cash flows | $181,732 | $102,505 | $57,550 |
Unaudited_Oil_and_Gas_Reserves4
Unaudited Oil and Gas Reserves Information (Schedule of Prices Used to Prepare Estimates of Oil and Gas Reserves) (Details) | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Oil (Bbl) [Member] | ' | ' | ' |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | ' | ' | ' |
Price per unit used to prepare reserve estimates, based upon average prices | 86.4 | 86.68 | 84.9 |
Gas (Mcf) [Member] | ' | ' | ' |
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | ' | ' | ' |
Price per unit used to prepare reserve estimates, based upon average prices | 4.4 | 3.76 | 5.07 |
Unaudited_Oil_and_Gas_Reserves5
Unaudited Oil and Gas Reserves Information (Schedule of Changes in the Standardized Measure for Discounted Cash Flows) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 |
Unaudited Oil and Gas Reserves Information [Abstract] | ' | ' | ' |
Standardized measure, beginning of year | $102,505 | $57,550 | $13,022 |
Sale and transfers, net of production costs | -38,569 | -21,321 | -8,337 |
Net changes in prices and production costs | -4,550 | -6,023 | 15,484 |
Extensions, discoveries, and improved recovery | 70,191 | 69,073 | 13,693 |
Changes in estimated future development costs | -6,006 | -42,578 | -20,471 |
Development costs incurred during the period | 5,106 | 39,739 | 16,252 |
Revision of quantity estimates | -14,214 | 21,058 | 15,424 |
Accretion of discount | 35,103 | 15,379 | 3,245 |
Net change in income taxes | -7,850 | -30,832 | -12,012 |
Purchase of reserves in place | 40,016 | 460 | 21,250 |
Standardized measure, end of year | $181,732 | $102,505 | $57,550 |
Unaudited_Oil_and_Gas_Reserves6
Unaudited Oil and Gas Reserves Information (Narrative) (Details) | Dec. 05, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Aug. 31, 2012 | Aug. 31, 2012 |
Boe [Member] | Boe [Member] | Boe [Member] | Boe [Member] | Boe [Member] | ||
Boe | Boe | Boe | Upward Adjustments Attributable To Higher Prices [Member] | Upward Adjustments Attributable To Reservoir Analysis And Well Performance [Member] | ||
Boe | Boe | |||||
Reserve Quantities [Line Items] | ' | ' | ' | ' | ' | ' |
Purchase of reserves in place (Boe) | ' | 2,227,456 | 151,135 | 2,378,421 | ' | ' |
Number of wells | 36 | ' | ' | 88 | ' | ' |
Revisions of previous estimates (Boe) | ' | -681,556 | 979,601 | 425,623 | 451,000 | 528,601 |
Extensions, discoveries, and other additions (Boe) | ' | 2,395,406 | 5,503,374 | 384,049 | ' | ' |
Unaudited_Quarterly_Financial_2
Unaudited Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-12 | Feb. 29, 2012 | Nov. 30, 2011 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | ||||||||
Unaudited Quarterly Financial Data [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Revenues | $14,674 | $12,314 | $10,921 | $8,314 | $6,750 | $7,522 | $6,219 | $4,479 | ' | ' | ' | ||||||||
Expenses | 8,022 | 7,449 | 6,439 | 4,768 | 3,336 | 3,676 | 3,344 | 2,860 | 26,678 | 13,215 | 7,182 | ||||||||
Operating income | 6,652 | 4,865 | 4,482 | 3,546 | 3,414 | 3,846 | 2,875 | 1,619 | 19,545 | 11,754 | 2,820 | ||||||||
Other income | -3,406 | 451 | -146 | 7 | 10 | 17 | 3 | 8 | -3,094 | 38 | -14,420 | ||||||||
Income before income taxes | 3,246 | 5,316 | 4,336 | 3,553 | 3,424 | 3,863 | 2,878 | 1,627 | 16,451 | 11,792 | -11,600 | ||||||||
Deferred income tax provision (benefit) | -2,250 | [1] | -1,701 | [1] | -1,604 | [1] | -1,315 | [1] | -1,477 | [2],[3] | -1,432 | [2],[3] | 3,241 | [2],[3] | ' | [2],[3] | -6,870 | 332 | ' |
Net income (loss) | 996 | 3,615 | 2,732 | 2,238 | 1,947 | 2,431 | 6,119 | 1,627 | 9,581 | 12,124 | -11,600 | ||||||||
Net income (loss) per common share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Basic | $0.02 | [4] | $0.07 | [4] | $0.05 | [4] | $0.04 | [4] | $0.04 | [4] | $0.05 | [4] | $0.13 | [4] | $0.05 | [4] | $0.17 | $0.26 | ($0.45) |
Diluted | $0.01 | [4] | $0.06 | [4] | $0.05 | [4] | $0.04 | [4] | $0.04 | [4] | $0.05 | [4] | $0.12 | [4] | $0.04 | [4] | $0.16 | $0.25 | ($0.45) |
Weighted average shares outstanding: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Basic | 66,283,325 | 55,238,098 | 54,900,326 | 51,661,704 | 51,409,340 | 51,292,810 | 47,445,178 | 36,098,212 | 57,089,362 | 46,587,558 | 26,009,283 | ||||||||
Diluted | 70,176,105 | 58,918,586 | 56,481,752 | 53,616,182 | 53,072,619 | 53,174,792 | 49,229,042 | 37,845,212 | 59,088,761 | 48,359,905 | 26,009,283 | ||||||||
Valuation allowance | ' | ' | ' | ' | ' | ' | $4,900 | ' | ' | ' | ' | ||||||||
[1] | For the three months ended August 31, 2013, income taxes were provided at a higher than expected rate due to a downward adjustment in the deferred tax asset related to the expiration of underlying stock options. | ||||||||||||||||||
[2] | No income tax was recognized during the three months ended November 30, 2011 as the provision for tax at the effective rate was offset by a change in the valuation allowance. | ||||||||||||||||||
[3] | For the three months ended February 29, 2012, the entire valuation allowance of $4.9 million was released and a net deferred tax benefit of $3.2 million was recorded. | ||||||||||||||||||
[4] | The sum of net income per common share for the four quarters may not agree with the annual amount reported because the number used as the denominator for each quarterly computation is based on the weighted-average number of shares outstanding during that quarter whereas the annual computation is based upon an average for the entire year. |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 05, 2012 | Aug. 31, 2013 | Aug. 31, 2012 | Aug. 31, 2011 | Nov. 13, 2013 | Aug. 27, 2013 | Aug. 27, 2013 | Sep. 16, 2013 | Sep. 16, 2013 | |
acre | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
Agreement One [Member] | Agreement One [Member] | Agreement Two [Member] | Agreement Two [Member] | |||||||
acre | Operated By Seller [Member] | acre | Operated By Seller [Member] | |||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Number of wells | ' | ' | ' | ' | 68 | 47 | 38 | ' | 21 | |
Mineral acres, gross | 3,933 | ' | ' | ' | ' | 3,639 | ' | ' | ' | |
Mineral acres, net | 3,196 | ' | ' | ' | ' | 1,006 | ' | 800 | ' | |
Purchase price | $42,527 | ' | ' | ' | ' | $17,500 | ' | $20,500 | ' | |
Cash | 29,012 | ' | ' | ' | ' | 13,100 | ' | 17,800 | ' | |
Issuance of shares | 13,515 | [1] | ' | ' | ' | ' | 4,400 | ' | 2,700 | ' |
Shares issued, exercise of warrants | ' | 3,275 | ' | ' | 4,300,000 | ' | ' | ' | ' | |
Proceeds from warrant exercises | ' | $3,275 | $3,000 | ' | $25,700 | ' | ' | ' | ' | |
[1] | The fair value of the consideration attributed to the Common Stock under ASC 805 was based on the Company's closing stock price on the measurement date of December 5, 2012. (3,128,422 shares at $4.32 per share) |