0001004878-12-000101.txt : 20120411 0001004878-12-000101.hdr.sgml : 20120411 20120411160040 ACCESSION NUMBER: 0001004878-12-000101 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20120411 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120411 DATE AS OF CHANGE: 20120411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNERGY RESOURCES CORP CENTRAL INDEX KEY: 0001413507 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 202835920 STATE OF INCORPORATION: CO FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35245 FILM NUMBER: 12754330 BUSINESS ADDRESS: STREET 1: 20203 HIGHWAY 60 CITY: PLATTEVILLE STATE: CO ZIP: 80651 BUSINESS PHONE: 303-591-7413 MAIL ADDRESS: STREET 1: 20203 HIGHWAY 60 CITY: PLATTEVILLE STATE: CO ZIP: 80651 FORMER COMPANY: FORMER CONFORMED NAME: Brishlin Resources, Inc. DATE OF NAME CHANGE: 20071217 FORMER COMPANY: FORMER CONFORMED NAME: Blue Star Energy Inc DATE OF NAME CHANGE: 20070926 8-K 1 form8kitem801april-12.txt FORM 8-K APRIL 11, 2012 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): April 11, 2012 SYNERGY RESOURCES CORPORATION ------------------------------------ (Exact name of registrant as specified in its charter) Colorado 001-35245 20-2835920 ---------------------------- --------------------- ------------------- (State or other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification No.) 20203 Highway 60 Platteville, Colorado 80651 ------------------------------------------ (Address of principal executive offices, including Zip Code) Registrant's telephone number, including area code: (970) 737-1073 -------------- N/A ----------------------------------------- (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 240.14a-12) [ ] 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)) Item 8.01 Other Events ------------------------ On April 11, 2012 the Company issued a press release, filed as Exhibit 99.1, pertaining to the Company's results of operations for the three and six months ended February 29, 2012. Item 9.01. Financial Statements and Exhibits --------------------------------------------- (d) Exhibits -------- Number Description ------ ----------- 99.1 Press Release 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: April 11, 2012 SYNERGY RESOURCES CORPORATION By:/s/ Frank L. Jennings ---------------------------- Frank L. Jennings, Principal Financial Officer EX-99 2 form8kitem801exh991april-12.txt EXHIBIT 99.1 PRESS RELEASE 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 ============= =============