Today, Synergy Resources announced further strengthening of the company’s Denver-Julesburg Basin (Colorado, Kansas, Nebraska, Wyoming) position via entry into an agreement with DeClar Oil & Gas, Inc. and Wolf Point Exploration, LLC covering certain mineral lease interests on some 8,700 undeveloped acres in the DJ Basin.
This is a solid move for SYRG that comes directly after the horizontal Niobrara well participation announcement involving PDC Energy (announced Feb. 21, SYRG owns a 28.75% WI). Synergy Resources has developed an impressive core area of operations in the DJ Basin focusing on the 7th largest domestic oil and gas field, the resource rich Wattenberg (by proved gas reserves, 9th in terms of production).
The acreage covered by today’s agreement falls in Colorado’s Larimer, Morgan and Weld counties, bringing SYRG up to a total of approximately 22.5k acres in the three counties. As per terms of the agreement, SYRG will be required to drill at least two wells in two years on the acreage and closing of the transaction is projected to be March 15 of this year (subject to customary closing conditions including due diligence or adjustments).
President of SYRG, Ed Holloway, detailed the exciting portfolio of leases assembled by DeClar and Wolf Point a little, explaining that well control and take-away capacity parameters for the properties all fell within company guidelines. Holloway indicated that these properties have production potential from multiple pay zones, including targets in the Niobrara, Greenhorn, J-Sand, and D-Sand formations.
Citing the overall organic growth of the company and its position in the DJ Basin, Holloway argued that the agreement strengthens SYRG’s position in what is the heart of an emerging horizontal play in the three-county area. Holloway explained that this agreement offers a great blend of both vertical and horizontal drilling opportunities for the company and pledged to implement the same practices which have been used so far to ensure maximized shareholder value from operations.
Pledging to continue explorative and acquisitive efforts in the DJ Basin on a case-by-case basis as opportunity dictates, Holloway concluded by reaffirming the cost and production strategy which has made SYRG successful.
This is as gas prices continue climbing steadily higher amid clear indicators of a destabilizing global supply chain, fueled in large part by Middle East tensions and outstanding sovereign debt concerns, especially in EU nations. It paints a bright picture for domestic energy production outlooks, as investors all around the world turn towards a rapidly re-emerging North American hydrocarbon boom.
For more information on the agreement, or to stay up to date on the latest developments at Synergy Resources Corp., please visit the company’s website at www.SynergyResourcesCorporation.com
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