Past year: ▼ 20%(3.12 – 6.16 USD)
Each one in plain English, with the numbers worked through for a shareholder.
13 June 2011material agreement● Neutral
On June 8, 2011 Synergy opened a revolving credit line with Bank of Choice (Greeley) for up to $7,000,000, at prime plus 2% (minimum 5.5%), due June 3, 2012. It is secured by receivables, equipment, inventory, fixtures and 64 wells in which Synergy holds 37.5% to 100% working interest. Funds are for development, acquisitions and working capital. The filing does not say how much was drawn.
25 May 2011asset acquisition disposition● NeutralMajor
On May 24, 2011 Synergy bought 87 producing wells, one shut-in well and leases over about 6,968 gross acres from Petroleum Exploration and Management, owned by Holloway and Scaff. It paid $10,000,000 cash, issued 1,381,818 restricted shares and a $5,200,000 note at 5.25% due January 2, 2012, secured by the acquired assets, and assumed none of PEM's liabilities. Disinterested directors and a majority of shares voting at a May 23 special meeting approved it, with Holloway and Scaff not voting. This is a much larger related-party deal than earlier ones; financial statements are to come by amendment.
25 Mar 2011asset acquisition disposition▲ Good
The January 2011 lease sale closed on March 21, 2011. Synergy received a second payment of $4,679,078 on top of the $565,439 down payment and will assign leases covering 2,383 net acres, fewer than the 2,570 originally agreed. The leases have no wells and the buyer is still unnamed. The two payments total $5,244,517 (an inference from adding them), below the original $5,654,439 headline price.
23 Mar 2011capital raising announcement● NeutralMajor
On March 21, 2011 Synergy issued 1,312,796 restricted shares to fourteen people in exchange for oil and gas leases covering 89,805 gross (80,334 net) acres in the D-J Basin. Director George Seward received 337,523 of those shares for leases covering 19,852 net acres, so part of this was a related-party deal. It adds acreage and dilutes existing shareholders.
20 Jan 2011material agreement▲ Good
On January 13, 2011 Synergy agreed to sell leases covering 2,570 net acres in Weld and Morgan Counties, Colorado to an unnamed independent oil and gas company at $2,200 per net acre, $5,654,439 in total. It received a $565,439 down payment on January 14; closing depends on title review and the price can be reduced for title defects. The leases have no wells.
14 Jan 2011capital raising announcement▲ GoodMajor
Synergy completed its $18.0 million private placement of 9,000,000 shares at $2.00, in two closings (December 23, 2010 and January 11, 2011), netting about $16.7 million. Proceeds are for acquisitions, the 2011 drilling program and working capital. Oppenheimer was lead placement agent with GVC Capital as co-agent, and the company agreed to file a registration statement for resale of the shares. This completes the raise started in December.
What it means for a shareholder
9.0m new shares at $2.00 to raise about $18.0m. That's 40% dilution: every existing holder's slice gets 40% smaller. If you held $1,000 of shares (500 at the issue price), your slice goes from 0.0037% to 0.00222% of the company. To keep it you'd need 333 more shares - about $666 at the issue price.
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29 Dec 2010capital raising announcement● NeutralMajor
On December 23, 2010 Synergy sold 6,502,500 shares of common stock to private investors at $2.00 per share, for net proceeds of $12,075,323. This is a new equity raise, the first stock sale in this record since the 2009 private placement, and it dilutes existing holders. The filing gives no use of proceeds.
What it means for a shareholder
6.5m new shares at $2.00 to raise about $12.1m. That's 32% dilution: every existing holder's slice gets 32% smaller. If you held $1,000 of shares (500 at the issue price), your slice goes from 0.0037% to 0.0025% of the company. To keep it you'd need 241 more shares - about $482 at the issue price.
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6 Oct 2010material agreement● Neutral
On October 1, 2010 Synergy bought oil and gas properties for $1,017,435 from Petroleum Management and Petroleum Exploration and Management, which are controlled by Holloway and Scaff (another related-party deal). The package is 6 producing wells, 2 shut-in oil wells, 15 drill sites (net 6.25 wells) and equipment, with 100% working interest (80% net revenue interest) in the eight wells, in the Wattenberg field. The filing says PEM paid an unrelated third party $920,000 in 2009, and the difference is interest, closing costs and equipment improvements.
16 Mar 2010capital raising announcement▲ GoodMajor
The convertible note offering closed finally on March 12, 2010 with all 180 units sold, after the company raised the size from 150 units. Net proceeds were about $16.6 million after placement agent commissions (GVC Capital LLC) and expenses; all investors get 50,000 warrants per unit. Proceeds go to the 35-well Wattenberg program, and as of March 15, 2010 the company had drilled 12 wells, completed 9, with 4 producing. This completes the note raise; the notes can convert into shares at $1.60 after May 31, 2010, which could dilute shareholders.
8 Mar 2010capital raising announcement● Neutral
Synergy reports that as of March 4, 2010 it had sold 162.23 units of its 8% convertible note offering (41.65 closed December 29, 2009 plus 120.58 more), up from 117.61 units reported in February. All investors get 50,000 warrants per unit instead of 37,000. Notes are due December 31, 2012, convertible at $1.60 after May 31, 2010, and secured by wells drilled or acquired with the proceeds; as of March 5, 2010, 11 wells were drilled, 9 completed and 4 in production, unchanged from the earlier update. This continues the note raise and adds potential dilution.
4 Mar 2010material agreement▲ GoodMajor
On February 26, 2010, Synergy signed a contract with Ensign United States Drilling to drill at least twenty wells in the Wattenberg field in Weld County, Colorado, to test the Niobrara, Codell and J-Sand formations, with the first well scheduled to start March 4, 2010. Estimated drilling cost is $125,000 to $180,000 per well, and Synergy will operate. This is consistent with the 35-well program the note proceeds are meant to fund, though the filing does not link them explicitly.
22 Feb 2010capital raising announcement● Neutral
This updates the convertible note offering: a further 23.16 units closed February 19, 2010, bringing total units sold to 117.61 (about $11.8 million at $100,000 each, an inference), with the higher 50,000-warrant-per-unit terms applying to all of them. Terms are otherwise unchanged (8% notes due December 31, 2012, convertible at $1.60 after May 31, 2010). The well count is unchanged from the prior update: eleven drilled, nine completed, four producing.
1 Feb 2010capital raising announcement● NeutralMajor
Synergy reported selling units of 8% promissory notes plus warrants: 41.65 units at $100,000 each closed December 29, 2009, and another 52.8 units by January 28, 2010 (94.45 units in total, about $9.4 million by simple multiplication, an inference). The notes mature December 31, 2012, are convertible into common stock after May 31, 2010 at an initial $1.60 per share, and are secured by wells drilled or acquired with the proceeds. Warrants per unit were raised from 37,000 to 50,000 (exercise price $6.00). Proceeds fund a 35-well 2009/2010 Wattenberg program; the company had drilled eleven wells, completed nine and put four into production as of January 29, 2010. This adds convertible debt and potential dilution.
5 Jan 2010auditor change● Neutral
This amendment adds the former auditor's letter (Exhibit 16) to the December 2009 auditor change and restates the reporting periods as from inception (December 28, 2007) to August 31, 2008, fiscal 2009 and the cumulative period to August 31, 2009. It still says the prior reports carried a going-concern qualification and there were no disagreements. It closes out the open item from the original filing.
24 Dec 2009auditor change● Neutral
On December 21, 2009, Synergy dismissed its auditor Stark Winter Schenkein & Co. and hired Ehrhardt Keefe Steiner & Hottman PC. The filing says the prior auditor's reports for fiscal 2008 and 2009 carried a going-concern uncertainty qualification, and that there were no disagreements with it. The prior auditor's confirmation letter was still to come by amendment.
6 Nov 2009material agreement● NeutralMajor
On November 3, 2009, Synergy signed another Ensign Drilling contract, for four wells in the Wattenberg field of the D-J Basin, with the first well (SRC 34-32) started that day. It holds a 62.5% working interest on a 160-acre Weld County lease and is the operator; 37.5% was bought for $60,000 from Petroleum Exploration & Management, which is controlled by Holloway and Scaff (another related-party deal), and 25% from an unrelated third party. Drilling is estimated at $175,000 to $200,000 per well plus $425,000 to complete. This extends the drilling program begun in August.
20 Aug 2009material agreement● NeutralMajor
On August 17, 2009, Synergy signed a drilling contract with Ensign Drilling Company for five to seven wells on the Meyer prospect in Weld County, Colorado, which it holds an option to buy from Petroleum Exploration and Management, LLC. Each well is estimated at about $175,000 to drill and $425,000 to complete, and drilling was expected to start in early September 2009. Synergy would hold a 31.25% to 62.5% working interest and operate the wells. This is its first drilling program described in these filings, following the capital raised in June.
30 June 2009capital raising announcement● NeutralMajor
On June 29, 2009, Synergy completed a private sale of 1,000,000 units at $3.00 each, each unit made up of two common shares, one Series A warrant ($6.00 exercise price) and one Series B warrant ($10.00 exercise price). That implies about $3 million raised (inference from units times price; the filing does not state the total) and more shares and warrants outstanding, which dilutes existing holders. A $47,600 commission was paid to Scottsdale Capital Advisors on 158,667 units.
What it means for a shareholder
1.0m new shares at $3.00 to raise about $3.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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15 May 2009asset acquisition disposition● Neutral
On May 13, 2009, Synergy Resources bought 120,122 feet of casing and 34,736 feet of tubing for $1,718,967 from Petroleum Management LLC, a company controlled by its own officers and directors Ed Holloway and William Scaff, Jr. (who together own about 41% of Synergy). It borrowed $1,161,811 from an unaffiliated bank toward the price, at prime plus 1/2% (minimum 5.5%), due May 8, 2010. This is a related-party purchase, and the loan is Synergy's first debt shown so far.
12 Sept 2008business combination● NeutralMajor
The deal closed on September 10, 2008: Brishlin acquired about 89% of Synergy Resources in exchange for 8,902,500 shares and 1,042,500 Series A warrants, after shareholders approved the 10-for-1 reverse split and the name change to Synergy Resources on September 8. Synergy's only asset at the time was about $2.5 million in cash, and the filing says the company plans to buy the remaining Synergy shares separately and begin drilling in the D-J Basin. Ed Holloway became President and CEO and William Scaff, Jr. became Vice President, and both are also directors. Existing Brishlin holders are due Series A warrants (exercisable at $6.00) once a registration statement is effective. This completes the exchange agreement from the prior filing.
3 Sept 2008material agreement● NeutralMajor
Brishlin Resources (the company that later became SRC Energy) agreed on August 27, 2008 to acquire 8,935,000 shares of Synergy Resources Corporation from certain Synergy shareholders, in exchange for the same number of its own post-split shares. The deal needs a 1-for-10 reverse split (10,380,000 shares would become 1,038,000) and a name change to Synergy Resources, voted on at a September 8, 2008 special meeting. Brishlin shareholders are also to receive one warrant per post-split share, once an SEC registration statement is effective. The agreement can be terminated if the deal is not completed by September 15, 2008.
