Denver-based Synergy Resources Corp. said Tuesday it has agreed to pay Noble Energy $505 million in cash to acquire a big block of oil and gas holdings near Greeley.
Synergy will pick up 33,100 net acres in Weld County from the state’s second largest producer.
About 80 percent of the production on the parcels comes from vertical wells. Synergy plans to drill horizontally, which it can do because the parcels are contiguous.
Synergy said it has identified about 900 locations on the land it is acquiring where it can drill, including 800 locations suitable for longer-length laterals.
The company plans to drill in the three levels of the Niobrara and Codell zones.
A closing on the undeveloped lands is expected this quarter, while the producing properties are expected to switch hands later in 2016.
Synergy plans to use the cash it has on hand, money on its credit line and an $80 million private debt placement to pay for the acquisition.
The company on Tuesday also reported a 65 percent jump in its oil and gas production in the first quarter of this year compared to the same period a year ago. Lower commodity prices, however, caused revenues to come in at $18.3 million in the quarter versus $18.9 million a year earlier.
Synergy reported a net loss of $51.4 million, including an impairment charge of $45.6 million to reflect the reduced value of its holdings. It reported a loss of $993,000 in the first quarter of 2015.
As of March 31, the company reported having $50.9 million in cash and $145.0 million on its credit line available.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or @aldosvaldi
