Synergy Resources Corp.
) has priced an upsized public offering of 11,500,000 common
shares at $6.25 a piece, with a 30-day over-allotment option for
an additional 1,725,000 shares. The offering is expected to close
on Jun 19.
The energy explorer plans to use the net proceeds from this
offering - together with available cash - to finance the
previously announced 18-month capital program, as well as for
As per Synergy Resources' spending agenda for the period till Aug
31, 2014, it has budgeted $154 million towards drilling program.
Of the total, more than 90% will go toward oil and gas
exploration projects in the Wattenberg Field.
Synergy Resources is an independent oil and gas exploration and
production company engaged in the acquisition, exploration, and
development of oil and gas properties. The company's operations
are concentrated primarily in the Wattenberg Field of the
emerging Niobrara shale formation within the DJ Basin of
southeast Wyoming and northern Colorado.
Synergy Resources currently retains a Zacks Rank #4 (Sell),
implying that it is expected underperform the broader U.S. equity
market over the next one to three months. This reflects the
company's string of disappointing results.
In the recently reported fiscal second quarter (three months
ended Feb 28, 2013), Synergy Resources delivered a negative 16.7%
earnings surprise - the fourth earnings miss in a row - hamstrung
by depressed crude prices.
While we expect Synergy Resources to perform below its peers and
industry levels in the coming months and see little reason for
investors to own the stock, one can look at
Oasis Petroleum Inc.
EXCO Resources Inc.
Harvest Natural Resources Inc.
) as good buying opportunities. These domestic upstream energy
operators - sporting a Zacks Rank #2 (Buy) - have solid secular
growth stories with potential to rise from current levels.
HARVEST NATURAL (HNR): Free Stock Analysis
OASIS PETROLEUM (OAS): Free Stock Analysis
SYNERGY RES CP (SYRG): Free Stock Analysis
EXCO RESOURCES (XCO): Free Stock Analysis
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