EXHIBIT 10.3




                        ADMINISTRATIVE SERVICES AGREEMENT

     Synergy   Resources  Inc.   ("Synergy")  and  Petroleum   Management,   LLC
("Petromanagement") agree as follows:

1. Petromanagement will provide the following to Synergy:

     A.   Office space and equipment yard at 20203 Highway 60, Platteville,
          Colorado 80651, Colorado for $10,000 per month.
     B.   Secretarial service, word processing, answering service, office
          equipment, telephone, fax, email and office supplies for $10,000 per
          month. Postage and courier charges will be billed separately at cost.
     C.   Additional employees as may be needed in-house such as a landmen,
          accountants and operations personnel, whose salary, compensation and
          benefits shall be charged to Synergy at cost.
     D.   Geologists, engineers, landmen and other independent contractor oil
          and gas professionals on an as needed basis. The charge for providing
          the services of such professionals will be the actual cost billed by
          such professionals to Petromanagement or billed to Synergy.

2.   All amounts payable to Petromanagement by Synergy will be due within 30
     days of invoicing by Petromanagement.

3.   Either party may terminate this Agreement on 30 days notice to the other
     party. If this Agreement is terminated by Synergy prior to June 30, 2008
     and for reasons other than the breach of any provisions of this Agreement
     by Petromanagement, then Synergy will pay Petromanagement a termination fee
     equal to that paid pursuant to Section 1 of this Agreement for the prior 60
     days.

4.   Any dispute relating to this Agreement will be settled through binding
     arbitration in Denver, Colorado in accordance with the commercial
     arbitration rules of the American Arbitration Association.

DATED:  June 11, 2008

 AGREED TO AND ACCEPTED:
                                           SYNERGY RESOURCES, INC.


                                           By /s/ Ed Holloway
                                              -----------------------------
                                              Ed Holloway, President


                                           PETROLEUM MANAGEMENT, LLC


                                           By /s/ William E. Scaff, Jr.
                                              -----------------------------
                                              Authorized Officer