EXHIBIT 99.1
SYNERGY RESOURCES CORPORATION REPORTS
SECOND QUARTER AND SIX MONTH RESULTS
PLATTEVILLE, CO, April 11, 2012: Synergy Resources Corporation (NYSE Amex:
SYRG), a domestic oil and gas exploration and production company focused in the
Denver-Julesburg Basin (the "D-J Basin"), today reported its second quarter and
six-month results for the period ended February 29, 2012. Net oil and natural
gas production for the second quarter 2012 increased to 1,091 barrels of oil
equivalent per day (Boe/d) compared to 386 Boe/d for the second quarter 2011.
Second Quarter and Six-Month 2012 Highlights
--------------------------------------------
o Reported record net income for the second quarter and six-month period
of $6,118,805 and $7,745,881 respectively;
o Posted second quarter 2012 revenues of $6,218,975 compared to
$2,033,687 for the three months ended February 28, 2011, a 206%
increase;
o Reported oil and natural gas production of 1,091 Boe/d for the second
quarter 2012, a quarter over quarter increase of 183%;
o For the six months, adjusted EBITDA, a non-GAAP measure, was
$7,260,267, representing a 68% return on revenue;
o Participated in the Company's first two horizontal wells with other
operators;
o Acquired an additional 8,875 acres in the D-J Basin which brings
Synergy's acreage position to 204,937 gross acres and 176,601 net
acres under lease;
o Completed the sale of 14.6 million shares of common stock at $2.75 per
share for net proceeds totaling approximately $37.4 million;
Monty Jennings, Chief Financial Officer of Synergy Resources Corporation, said
"Increased production from our new wells fueled record second quarter and six
month results. Second quarter revenues surged 206%. Six-month revenues grew by
208%. Our six month adjusted cash flows from operations, a non-GAAP measure,
were $7,977,072 in 2012 compared to $1,977,488 in 2011, an increase of 303%. And
earnings in both the three-month and six-month period totaled $6,118,805 and
$7,745,881 respectively. On top of the record financial performance we also
successfully completed a secondary offering of 14.6 million shares of common
stock resulting in proceeds of approximately $37.4 million. We believe that the
proceeds from our equity offering, plus cash flow from operations, along with
additional borrowings available under our revolving line of credit will be
sufficient to meet our liquidity needs during the 2012 fiscal year."
Operating income for the three month period ended February 29, 2012 was
$2,875,295 compared to operating income of $686,413 for the comparable year-ago
quarter. Revenues for the second quarter were a record $6,218,975 compared to
$2,033,687 for the comparable year-ago quarter. Average prices for the quarter
were $92.33 per barrel and $4.09 per mcf. Net income, including the effect of
$3,241,000 in tax benefits in 2012, was $6,118,805 or $0.12 per diluted share
for the second quarter 2012 compared to a net loss of $(11,738,360) or $(0.55)
per diluted share for the same year ago period. Improved operating results for
the quarter were associated with increasing revenues from the Company's wells
completed during 2012. As of February 29, 2012, Synergy Resources had 157
producing wells, a comparative increase of 101 wells, which consists of 64 wells
added through acquisitions and 37 wells completed since February 28, 2011. To
date, all wells drilled by Synergy have been 100% successful in reaching
commercial production.
Operating income for the six month period ended February 29, 2012 was $4,494,188
compared to operating income of $697,251 for the comparable year-ago period.
Revenues for the six-month period were a record $10,697,839 compared to
$3,477,282 for the comparable year-ago period. The Company reported net income
of $7,745,881 or $0.18 per share for the six-month period compared to a net loss
of $(12,898,363) or $(0.73) per diluted share for the same year ago period. Net
income for 2012 included a tax benefit of $3,241,000, representing recognition
of a deferred tax asset.
Edward Holloway, Chief Executive Officer and President of Synergy Resources,
said, "Continued execution of our vertical and horizontal drilling program in
the liquid-rich Wattenberg Field drove strong second quarter and six month
results. Since the start of our current drilling program to the end of our
second quarter, we've drilled 31 wells, of which 18 have reached productive
status while completion activities are underway on 13 wells, most of which are
expected to reach productive status during our fiscal third quarter.
Additionally, we participated in our first two horizontal wells with Noble
Energy and PDC Energy. We plan to drill and complete a total of 52 vertical and
directional wells in fiscal 2012 as well as participate in additional horizontal
wells with notable operators."
Holloway concluded, "While the first half of fiscal 2012 has been the most
successful period in our Company's history, I'm even more excited about the
future. Visible growth prospects on our vertical and horizontal drilling program
are strong. Our core position in the Wattenberg Field provides us with strong
upside potential in the oil and liquid-rich portion of the play."
The following table presents certain per unit metrics that compare results of
the quarterly and six month reporting periods:
Financial Statements and Footnotes
Condensed financial statements are included in this earnings release. Additional
financial information, including footnotes that are considered an integral part
of the financial statements, can be found in Synergy's Edgar Filings at
www.sec.gov on Form 10-Q for the period ending February 29, 2012.
About Synergy Resources Corporation
Synergy Resources Corporation is a domestic oil and natural gas exploration and
production company. Synergy's core area of operations is in the Denver-Julesburg
Basin, which encompasses Colorado, Wyoming, Kansas, and Nebraska. The Wattenberg
field in the D-J Basin ranks as the 7th largest field in the U.S. in terms of
proved gas reserves and 9th in production. Synergy's corporate offices are
located in Platteville, Colorado. More company news and information is available
at www.SYRGinfo.com.
This press release may contain forward-looking statements. The actual results
could differ materially from a conclusion, forecast or projection in the
forward-looking information. Certain material factors or assumptions were
applied in drawing a conclusion or making a forecast or projection as reflected
in the forward-looking information.
Contact:
Synergy Resources Corporation
970-737-1073
investorrelations@syrginfo.com
SYNERGY RESOURCES CORPORATION
CONDENSED BALANCE SHEETS
February 29, August 31,
2012 2011
----------------- -------------------
ASSETS
Cash and cash equivalents $ 38,852,524 $ 9,490,506
Other current assets 6,481,572 5,140,452
----------------- -------------------
Total current assets 45,334,096 14,630,958
----------------- -------------------
Oil and gas properties and other
equipment 67,743,351 48,898,064
Deffered tax asset, net 3,241,000 -
Other assets 219,912 168,863
----------------- -------------------
Total assets $ 116,538,359 $ 63,697,885
================= ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 14,654,442 $ 13,946,413
Revolving credit facility 5,392,110 -
Asset retirement obligations 815,873 643,459
----------------- -------------------
Total liabilities 20,862,425 14,589,872
----------------- -------------------
Shareholders' equity:
Common stock and paid-in capital 122,869,634 84,047,594
Accumulated deficit 27,193,700 (34,939,581)
----------------- -------------------
Total shareholders' equity 95,675,934 49,108,013
----------------- -------------------
Total liabilities and
shareholders' equity $ 116,538,359 $ 63,697,885
================= ===================
SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
February 29, February 28, February 29, February 28,
2012 2011 2012 2011
--------------- --------------- --------------- ---------------
Oil and gas revenues $ 6,218,975 $ 2,033,687 $ 10,697,839 $ 3,477,282
--------------- --------------- --------------- ---------------
Expenses:
Lease operating expenses 854,414 260,480 1,560,734 463,155
Depreciation, depletion,
and amortization 1,552,237 647,205 2,766,079 1,232,186
General and administrative 937,029 439,589 1,876,838 1,084,690
--------------- --------------- --------------- ---------------
Total expenses 3,343,680 1,347,274 6,203,651 2,780,031
--------------- --------------- --------------- ---------------
Operating income 2,875,295 686,413 4,494,188 697,251
--------------- --------------- --------------- ---------------
Other income (expense):
Change in fair value of
derivative conversion
liability - (9,926,158) - (10,315,421)
Interest income and expense,
net 2,510 (2,498,615) 10,693 (3,280,193)
--------------- --------------- --------------- ---------------
Total other (expense) 2,510 (12,424,773) 10,693 (13,595,614)
--------------- --------------- --------------- ---------------
Provision for income tax
benefit 3,241,000 - 3,241,000 -
--------------- --------------- --------------- ---------------
Net income (loss) $ 6,118,805 $(11,738,360) $ 7,745,881 $ (12,898,363)
=============== =============== =============== ===============
Net income (loss) per common share:
Basic $ 0.13 $ (0.55) $ 0.19 $ (0.73)
=============== =============== =============== ===============
Diluted $ 0.12 $ (0.55) $ 0.18 $ (0.73)
=============== =============== =============== ===============
Weighted average
shares outstanding:
Basic 47,445,178 21,487,951 41,771,695 17,580,331
=============== =============== =============== ===============
Diluted 49,229,042 21,487,951 43,536,398 17,580,331
=============== =============== =============== ===============
SYNERGY RESOURCES CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
For the six months ended February 29, 2012 and February 28, 2011
2012 2011
----------- ------------
Cash flows from operating activities:
Net income (loss) $ 7,745,881 $(12,898,363)
----------- ------------
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation, depletion, and amortization 2,766,079 1,232,186
Provision for deferred taxes (3,241,000) -
Other, non-cash items 215,109 13,643,665
Changes in operating assets and liabilities:
Current assets (1,328,365) (904,715)
Current liabilities 3,473,420 $ 2,596,173
----------- ------------
Total adjustments 1,885,243 16,567,309
----------- ------------
Net cash provided by (used in) operating
activities 9,631,124 3,668,946
----------- ------------
Cash flows from investing activities:
Acquisition of property and equipment (17,882,999) (5,946,766)
----------- ------------
Net cash used in investing activities (17,882,999) (5,946,766)
----------- ------------
Cash flows from financing activities:
Net proceeds from sale of stock 37,421,783 16,690,721
Net proceeds from borrowings 192,110 -
----------- ------------
Net cash provided by financing activities 37,613,893 16,690,721
----------- ------------
Net decrease in cash and equivalents 29,362,018 14,412,901
Cash and equivalents at beginning of period 9,490,506 6,748,637
----------- ------------
Cash and equivalents at end of period $38,852,524 $21,161,538
=========== ============
SYNERGY RESOURCES CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Six Months Ended
February February
29, 2012 28, 2011
ADJUSTED CASH FLOW FROM OPERATIONS ------------- -------------
Cash payments $ 17,882,999 $ 5,946,766
Non-cash payments 694,145 -
Accrued costs, beginning of period (4,967,369) (3,446,439)
Accrued costs, end of period 7,829,177 2,515,024
Asset retirement obligation 135,517 76,663
------------- -------------
Capital expenditures $ 21,574,469 $ 5,092,014
============= =============
Six Months Ended
February February
29, 2012 28, 2011
ADJUSTED EBITDA 2012 2011
------------- -------------
Net income (loss) $ 7,745,881 $(12,898,363)
Add back:
Depreciation, depletion, and amortization 2,766,079 1,232,186
Provision for income tax benefit (3,241,000) -
Change in fair value of derivative
conversion liability - 10,315,421
Interest expense and related items, net (10,693) 3,280,193
------------- -------------
Adjusted EBITDA $ 7,260,267 $ 1,929,437
============= =============