PLATTEVILLE, Colo., Dec. 2, 2011 /PRNewswire/ -- Synergy Resources Corporation (NYSE Amex: SYRG), a domestic oil and gas exploration and production company focused in the Denver-Julesburg Basin (the "D-J Basin"), today announced that it has increased its $7 million revolving line to a $15 million revolving line of credit with Bank of Choice.
Approximately $5,342,000 from the line of credit was used to repay Synergy's loan to Petroleum Exploration and Management, LLC., which was required by the terms of the bank note. Remaining proceeds from the revolving line of credit will be invested primarily in its development drilling program in the Wattenberg Field. Synergy Resources has an active drilling program in the oil and liquid-rich portion of the Wattenberg Field located in the Denver Julesburg Basin and presently has more than 400 potential drilling locations.
William E. Scaff, Vice President of Synergy, stated, "Fiscal 2012 is rapidly shaping up to be our busiest and most exciting year at Synergy Resources. Capital from the $15 million revolving line of credit will immediately be put to work to increase production and drive reserve growth in our oil and natural gas projects."The new line will bear interest at the Prime Rate, subject to a floor of 3.25%, which is a 200 basis point improvement over the interest rate on the old line. Interest is payable monthly. The new borrowing arrangement has a maturity date of November 30, 2014, with all outstanding principal due at maturity. The amount of the commitment is subject to adjustment based upon a borrowing base calculation that includes the value of oil and gas reserves. Certain of Synergy's assets including substantially all developed properties, have been designated as collateral under the arrangement. Craig Rasmuson, Vice President of Operations, stated, "Since our most recent operations update on October 17, 2011, where we announced the successful drilling of 14 wells with a 100% success rate, we've successfully drilled an additional four wells and are on schedule to finish drilling all of the 21 wells in the initial phase of our 2012 drilling program. Completion activities are in progress and we expect substantially all of the wells to commence production before the end of our second fiscal quarter." About Synergy Resources Corporation Synergy Resources Corporation is a domestic oil and natural gas exploration and production company. Synergy's core area of operations is in the Denver-Julesburg Basin, which encompasses Colorado, Wyoming, Kansas, and Nebraska. The Wattenberg field in the D-J Basin ranks as the 7th largest field in the U.S. in terms of proved gas reserves and 9th in production. Synergy's corporate offices are located in Platteville, Colorado. More company news and information is available at www.SYRGinfo.com. This press release may contain forward-looking statements. The actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information.