UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 1, 2013
SYNERGY RESOURCES CORPORATION
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(Exact name of Registrant as specified in its charter)
Colorado 001-35245 20-2835920
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(State or other (Commission File No.) (IRS Employer
jurisdiction of incorporation) Identification No.)
20203 Highway 60
Platteville, Colorado 80651
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (970) 737-1073
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N/A
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(Former name or former address if changed since last report)
Check appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below)
[] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
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[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-14(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a material definitive agreement
On March 1, 2013, Synergy Resources Corporation ("Synergy") entered into an
Exploration Agreement (the "Agreement") with Vecta Oil and Gas, Ltd., a Texas
limited partnership ("Vecta"), relating to certain oil and gas properties
located in the Denver-Julesberg Basin, Colorado. Pursuant to the provisions of
the Agreement, at closing:
o Greenhorn Project Area Leasehold (91,837 gross and 43,757 net acres) -
Synergy and Vecta shall exchange 6,977 net acres, more or less, in
certain oil and gas leases located in Morgan and Weld Counties,
Colorado, and Synergy shall acquire an additional 4,580 net acres from
Vecta, more or less, in certain oil and gas leases located in Morgan
and Weld Counties, Colorado. Following such exchange and acquisition,
Synergy shall own an undivided 35% interest and Vecta shall own an
undivided 65% interest in and to the 43,757 net acres, more or less,
comprising the Greenhorn Project Area leasehold.
o Wattenberg Extension Area Leasehold (2,758 gross and 2,023 net acres)
- Vecta shall convey to Synergy 65% of its right, title and interest
in and to certain oil and gas leases covering 2,023 net acres, more or
less, in Weld County, Colorado, such acreage comprising the Wattenberg
Extension Area leasehold.
o State of Colorado Leasehold (960 gross and 960 net acres) - Vecta
shall convey to Synergy 30% of its right, title and interest in and to
certain oil and gas leases from the Board of Land Commissioners of the
State of Colorado covering 960 net acres, more or less, in Weld
County, Colorado, such acreage comprising the State of Colorado joint
interest leasehold. Following such exchange and acquisition, Synergy
shall own an undivided 65% interest and Vecta shall own an undivided
35% interest in and to such leasehold acreage.
o Supplemental Greenhorn Project Area Leasehold (9,838 gross and 1,904
net acres) - Vecta shall convey to Synergy 35% of its right, title and
interest in and to certain oil and gas leases covering 1,904 net
acres, more or less, in Morgan and Weld Counties, Colorado, such
acreage comprising supplemental Greenhorn Project Area leasehold.
o Synergy will pay to Vecta a leasehold reimbursement fee consisting of
a cash payment of $2,841,855 and the issuance to Vecta of 100,000
shares of its restricted common stock having a value, for purposes of
the Agreement, of approximately $640,000.
The closing of the Agreement is subject to the review of title to the oil
and gas leases and the satisfaction of other conditions customary to a
transaction of this nature. In total, the Agreement covers approximately 101,675
gross (45,661 net) acres in which Synergy will hold a 35% interest and
approximately 3,718 gross (2,983 net) acres in which Synergy will hold a 65%
interest. Subject to certain exceptions, it is the intention of the parties that
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the oil and gas leases under the Agreement be delivered with an 80% net revenue
interest, and each party shall reserve an overriding royalty interest, subject
to proportionate reduction, equal to the difference between existing burdens and
20%; provided, however, no such overriding royalty interest shall be reserved
with respect to any state or federal oil and leases or any of the oil and gas
leases relating to the supplemental Greenhorn Project Area leasehold.
Should the Agreement with Vecta close, Synergy and Vecta will work together
to (a) acquire new proprietary seismic data across a portion of the oil and gas
leases which are the subject of the Agreement; (b) drill a horizontal well on
one of the leases to evaluate either the Greenhorn Shale or Niobrara Shale; and
(c) conduct other exploration projects in the area covered by the leases as may
be mutually agreed upon. The Agreement contemplates the drilling of an initial
well to test the Greenhorn formation on or before October 31, 2013.
The Agreement names Synergy as the operator for all wells to be drilled,
pursuant to the terms and conditions of a joint operating agreement. The
Agreement establishes an area of mutual interest covering certain lands in in
Morgan and Weld Counties, Colorado, and contains certain other provisions
customary to exploration agreements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 6, 2013
SYNERGY RESOURCES CORPORATION
By: /s/ Frank L. Jennings
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Frank L. Jennings, Principal Financial
and Accounting Officer