Synergy Resources Corp. (NYSE: SYRG) has entered into a joint venture agreement in Colorado with Vecta Oil & Gas Ltd.
According to the agreement, the companies will jointly develop oil and gas leases covering lands in Morgan & Weld counties, Colo. Synergy and Vecta will each contribute acreage to the joint venture. The joint venture will delineate two separate areas of mutual interest. In the first area covering 45,661 net acres, Synergy will have a 35% working interest and the second area covering 2,983 net acres, Synergy will have a 65% working interest. Synergy will be the designated operator of both areas.
Synergy and Vecta will work together to acquire new proprietary seismic data across a portion of the oil and gas leases. Synergy will drill a horizontal well on one of the leases to evaluate either the Greenhorn or Niobrara shale. Synergy will also conduct other exploration projects in the area covered by the leases as may be mutually agreed upon. The joint venture contemplates the drilling of an initial well to test the Greenhorn formation on or before Oct. 31.
Synergy will pay to Vecta a leasehold reimbursement fee consisting of a cash payment of about US $2.8 million and the issuance to Vecta of 100,000 shares of its restricted common stock having a value, for purposes of the agreement, of $640,000.
Synergy's net acreage position in the Wattenberg Extension area has increased by 36% to 19,400 acres.
Vecta Oil & Gas Ltd. is an oil and gas exploration company with offices in Dallas, Denver and Houston.
Synergy Resources Corp. is an oil and gas company engaged in the acquisition, exploitation, exploration, development, and production of oil and natural gas properties. The company is based in Platteville, Colo.