Wattenberg operator Synergy Resources Corporation (ticker: SYRG) issued preliminary December 31, 2016 financial results.
Highlights
- Production sales volumes for three and twelve months ended December 31, 2016 were 13,269 BOE/day (58% oil) and 11,670 BOE/day (53% oil), respectively
- Drilling and completion capital expenditures for three and twelve months ended December 31, 2016 were $47.7 million and $130.9 million, respectively
- Liquidity of $178 million is composed of the undrawn revolver plus cash on hand at year-end 2016 and does not include proceeds from the recently announced divestiture
- Proved reserves at year-end 2016 increased 41% over the December year-end 2015
| Three Months Ended | % Chg. | Twelve Months Ended | % Chg. | ||||||||||||||||
| Average Daily Volumes | 12/31/2016 | 12/31/2015 | 12/31/2016 | 12/31/2015 | |||||||||||||||
| Daily Production (BOE/day) | 13,269 | 10,815 | 23% | 11,670 | 9,548 | 22% | |||||||||||||
| Product Price Received | |||||||||||||||||||
| Crude Oil ($/Bbl) | $40.94 | $34.37 | 19% | $34.43 | $40.08 | -14% | |||||||||||||
| Natural Gas ($/Mcf) | $3.18 | $2.44 | 30% | $2.44 | $2.71 | -10% | |||||||||||||
| Differentials | |||||||||||||||||||
| NYMEX WTI | -$8.20 | -$7.56 | 8% | -$8.77 | -$8.65 | 1% | |||||||||||||
| NYMEX Henry Hub | $0.14 | $0.32 | -56% | -$0.08 | $0.13 | nm | |||||||||||||
| Unit Cost Analysis | |||||||||||||||||||
| Lease Operating Expense ($/BOE) | $4.08 | $3.16 | 29% | $4.67 | $4.61 | 1% | |||||||||||||
| Proved Reserves – December 31, 2016 * | |||||||||||||||||||
| Developed Producing (PDP) |
Undeveloped (PUD) |
Total Proved | |||||||||||||||||
| Oil/Condensate – Mbbl | 7,435 | 30,597 | 38,032 | ||||||||||||||||
| Gas – MMcf | 62,570 | 269,351 | 331,921 | ||||||||||||||||
| Total – MBOE | 17,863 | 75,489 | 93,352 | ||||||||||||||||
| * Reserve information prepared by independent reserve engineering firm, Ryder Scott Company, L.P. | |||||||||||||||||||
Production
Production for the three months ended December 31, 2016 increased 23% year-over-year and was up 23% sequentially.
Production for 2016 as a whole increased 22% from 2015, averaging 11,670 BOE/day, above the high end of the Company’s full year guidance range of 11,100-11,300 BOE/day. Synergy’s oil differentials improved by 11% for the three months ended December 31, 2016 compared to the three months ended September 30, 2016 reflecting the favorable impact of uncommitted volumes.
Operations Update
Operations at the Evans drilling spacing unit (DSU) are on schedule with completion work continuing on the second tranche of six extended reach lateral wells (~12,000′) while flow-back operations have begun on the first tranche of six long reach lateral wells (~10,000′). A second crew has commenced completion work on the Wiedeman DSU where the Company has drilled four standard reach lateral wells (~4,500′) and four long reach lateral wells.
The Company is currently drilling 12 mid-reach lateral wells (~7,500′) on the Orr DSU and on the Orr State DSU.
Synergy said it plans to issue its three and twelve months ended December 31, 2016 earnings release on Thursday, February 23, 2017 after the close of trading on the New York Stock Exchange.
