Replies to post #34 on Synergy Resources Corp. (SYRG)

[Timothy Smith]

@BooBoo - I think that they will trade more in sync but do not anticipate it to be to that extent. WTI is demanding more price per barrel and this will likely increase going into 2014 IMO.

[Timothy Smith]

$SYRG - Synergy trades well above its book value (PBV=3) with a balanced production mix of 2,067 boepd (54% oil) in Q2 FY 2013, and holds proved reserves of 10.7 MMboe (August 2012).

With Enterprise Value (EV) at $390 million, Synergy trades at a staggering $188,700/boepd and a whopping $36.45/boe of proved reserves.

In Q2 FY 2013, the long-term debt rose to ~$42 million due to the recent acquisition of Orr Energy that owned 360 boepd and 1,005 net acres in the Wattenberg Field.

With estimated annual operating cash flow at $30-35 million for FY 2013, the D/CF ratio (annualized) is at ~1.3x which is decent. However, it must be pointed out that the long-term debt will rise further during the next quarters, to fund the Capex budget for FY 2013 which is estimated at $82 million.

It is also worth noting that Synergy's core areas are not heavily oil-weighted, but they weigh more on the dry gas and the natural gas liquids (NGL) production. This is why, Synergy has a balanced production mix (54% oil and 46% natural gas).

Look for improvements to NG pricing to also be a catalyst here. This likely is a good hold for 2014 at these levels in my opinion.