Synergy Resources Corp. is a domestic oil and natural gas exploration and production company operating in the Wattenberg Field of the Denver-Julesburg Basin in northeast Colorado. The company operates 308 wells throughout the region, in addition to having an ownership interest in nearly 300 net producing wells. Through these projects, Synergy has access to an estimated 40.3 million barrels of oil equivalent, according to a February report by independent oil and gas consulting firm Ryder Scott Company.
The Denver-Julesburg Basin has established itself as one of the most important producing areas in the country by consistently generating oil and gas since its discovery in 1901. The total value of past production from the region, if calculated in modern prices, would exceed $150 billion. For Synergy, the basin’s high level of predictability and high drilling success rate could provide the company with an opportunity to achieve rapid return on investment in the future.
During its fiscal second quarter of 2015, Synergy leveraged its position within the Wattenberg field to dramatically increase production. In addition to increasing year-over-year revenue by three percent, the company recorded a 98 percent year-over-year increase in overall production. Primarily, this spike was a result of Synergy’s December acquisition of a 5,040 acre leasehold in the Wattenberg Field, which provided access to 73 operating vertical wells, as well as non-operated working interests in 17 horizontal wells.
“Our growth in proved reserves is a result of the success of our operated horizontal drilling program, the performance of the horizontal wells in the Wattenberg Field, and proved reserves added as a result of our acquisition we completed in December,” William E. Scaff, co-chief executive officer of Synergy, stated in a news release.
In May, Synergy continued to expand its presence in the Denver-Julesburg Basin when it reached an agreement with its non-operating partner to purchase the remaining 35 percent working interest in the Greenhorn prospect, which is located in the northeast extension area of the basin.
“Over the past twelve months we have been pursuing a higher working interest in all of our operated assets both in the core of the Wattenberg Field and in the extension area,” Scaff continued. “This acquisition… is consistent with that objective.”
Despite a sharp decrease in commodity prices that’s persisted throughout the first six months of 2015, Synergy’s recent performance is a promising indication for prospective investors moving forward. Look for the company to leverage its established position within the Greater Wattenberg Field with the goal of encouraging sustainable returns in the years to come.
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