Stifel Raises PT on Synergy Resources (SYRG)

Stifel analyst, Michael Scialla, notes that the stocks of financially stressed E&P companies have significantly outperformed on the back of surging oil prices over the past week, and he believes Synergy Resources Corporation (NYSE: SYRG) is better positioned to create shareholder value amid a challenging price environment than the vast majority of its small and mid-cap peers. No change to Buy rating but PT goes to $10 from $8.

Since drilling and completing the Kiehn and Cannon pads, SYRG has beefed up its technical staff including Tom Birmingham, VP of Exploration, Mike Eberhard, VP of Completions, and Nick Spensce, VP of Drilling. This group oversaw the nearby 10-well Vista pad, expected to be completed in late April when water costs/well are $70-$120k below current levels. Positive results from this pad should remove investor doubt over the quality of the company's western Wattenberg acreage or its ability to execute.

Last week, SYRG reported that 4 MRLs on the Bestway pad were tracking above management's 700 MBoe type curve with an average IP-90 of 730 Boe/d or 92 Boe/d/1000 ft., 7% above the analyst's Middle Core Niobrara type curve. The latter underpins Stifel's $10/share NAV estimate.

While the stocks of financially stressed E&P companies have significantly outperformed on the back of surging oil prices over the past week, we continue to believe SYRG is better positioned to create shareholder value amid a challenging price environment than the vast majority of its small and mid-cap peers.

For an analyst ratings summary and ratings history on Synergy Resources Corporation click here. For more ratings news on Synergy Resources Corporation click here.

Shares of Synergy Resources Corporation closed at $8.18 yesterday.

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