More SYRG Info
CORPORATE OVERVIEW
Synergy is an oil and gas exploration and production company with properties located in the
Wattenberg Field, a sub area within the Denver-Julesburg Basin (DJ). The company began
operations in September 2008, when it reversed merged into a shell and agreed to acquire leases from
Petroleum Management (PM) and Petroleum Exploration and Management (PEM) two companies
controlled by the principal officers of Synergy, Ed Holloway and Bill Scaff. In short order, the
company contracted to manage and participate in 2 Kerr-McGee wells, acquired leases through
auctions and initiated a drilling program.
Investors, who originally funded the shell, were interested in tapping into the experience that
Holloway had accumulated by drilling 350 wells in the DJ basin over a 25 year period and Scaff had
developed in executive positions at Dresser Industries and TOTAL Petroleum. In 1997, the two cofounded
Petroleum Management (PM) and in 2001, Petroleum Exploration and Management (PEM),
a company that is now under non-binding letter of intent to be acquired by Synergy.
A relatively mature field, the multiple layered shale deposits within the DJ Basin has drawn
increasing interest as technology for hydraulic fracturing technology to stimulate production has
revitalized the area. In addition direction drilling has opened up the ability to drill multiple wells
from one platform and access deposits under built up or ecologically sensitive areas, while horizontal
drilling has been used to create a lateral well bore, which can more full exploit the reserves within
tight formations. Finally, producers are finding that the repeated “refracing” of wells has had the
result of improving production back up to and in some cases above prior levels, with a more gradual
rate of decline, thus giving new life to older wells as illustrated in Chart 1 on the following pages.
With the success of recent financings and a sale of leases, the company is in the throes of a $27.0m
investment program, $12.0m of which is for acquisitions including 8 wells purchased in FY Q1 and
for the pending deal with PEM. The other $15.0m is for the continuation of drilling and for the
hydraulic fracture stimulation of new wells to open additional zones of production and to revitalize
older wells acquired from PEM.
Wattenberg began producing in the early 1970’s and ranks as the 7th largest producing area in the
U.S. Returns are more moderate as compared to newer fields like the Bakken Shale of North Dakota,
but risks are considerably less and the success rate in drilling new wells is high. Moreover, new
technology has given the area new life.
