Synergy Buys Wattenberg Assets For $18 Million

To purchase 38 wells with a 27.5% WI in 3,639 gross acres, with 902 acres located in the core of the Wattenberg field.

Synergy Resources Corp. (NYSE: SYRG) entered into a purchase and sale agreement with an unnamed private party for assets in the Wattenberg field for US $17.5 million.

Under the agreement entered on Aug. 27, Synergy will purchase 38 wells with a 27.5% working interest and 22% net revenue interest in 3,639 gross acres, 1,006 net acres of which 902 acres are located in the core of the Wattenberg field. Synergy will be the operator of these wells. Other assets being acquired under the agreement include interest in nine non-operated wells and a 25% interest in a class II disposal well. Estimated average production of the acquired wells is 200 barrels of oil equivalent per day (BOE/D) as of July 31.

Under the agreement, Synergy will pay the seller $17.5 million, 75% in cash and 25% in common stock. The agreement has an effective date of Aug. 1 and is expected to close during the fourth calendar quarter. Closing is subject to the completion of due diligence and the satisfaction of other conditions that are customary for transactions of this nature.

"We are pleased to announce the purchase of these assets in the Wattenberg field which complement our current acreage position in the oilier portions of the field. We are focused on increasing our position and ramping up production in the Wattenberg which we believe offers some of the best returns on capital in North America," Ed Holloway, president and CEO, said in the release.

Synergy Resources Corp. engages in the acquisition, exploitation, exploration, development, and production of oil and natural gas properties primarily located in the Denver-Julesburg Basin in northeast Colorado. The company is based in Platteville, Colo.