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Synergy Resources Corp. (SYRG.OB) Continues to Expand Wattenberg/D-J Basin Footprint with New Acquisition

Synergy Resources, – the domestic oil and gas firm with primary operations in the resource-rich Wattenberg field in the Denver-Julesburg Basin, where the Company has leased some 17,147 gross acres (11.5k net), reported acquisition of additional properties in the Wattenberg.

The properties were acquired for $1,017,435 from PEM (Petroleum Management, LLC and Petroleum Exploration and Management, LLC) which is actually controlled by officers and directors of SYRG, Ed Holloway and William E. Scaff, Jr., and consist of:

• Six Producing oil and gas wells, and Two Shut-in oils wells (100% Working Interest; 80% Net Revenue Interest in both)
• 15 drill sites (6.25 net)
• Ancillary equipment

The properties were initially acquired by PEM in 2009 from an unrelated third party for some $920k. The difference in cost between this sum and the price paid by SYRG is accounted for by interest on the amount paid by PEM, including closing costs and improvements, specifically equipment.

Ed Holloway, CEO of SYRG, explained that the original seller wanted to sell the assets before SYRG had the capital to make the acquisition. However, because competition within the sector to acquire such prime real estate was so high, PEM grabbed the properties so that SYRG would not miss out on this great opportunity to expand its activity within the D-J Basin.

Holloway noted that these properties are right in the middle of the Wattenberg field, and expressed the Company’s excitement to be adding them to its already impressive portfolio.

Completion of the Company’s 36-well program on-time and under budget couldn’t have been more aptly timed as SYRG is now able to make this acquisition.

Holloway projected plans to refrac the six wells currently in production by close of 2010 in order to boost output. This will be a very inexpensive way to get more out of the assets, leading to higher near-term revenue generation in preparation for expanded operations at the site.
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