Synergy Resources Increases Revolving Line of Credit to $20MM
Synergy Resources, a domestic oil and gas exploration and production company focused in the Denver-Julesburg Basin (the D-J Basin), announced a $5 million increase to its revolving line of credit with Bank of Choice, a division of NBH Bank.
The amendment to the borrowing arrangement increases the maximum available borrowings from $15 million to $20 million. Other terms will remain unchanged. Interest expense is the Prime Rate, subject to a floor of 3.25%, payable monthly. The maturity date remains at November 30, 2014, with all outstanding principal due at maturity.
As of April 26, 2012 approximately $5.4 million had been borrowed under the line of credit. 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 Synergy assets, including substantially all developed properties, have been designated as collateral under the arrangement. As of April 26, 2012, the borrowing base requirement is not restrictive.
William Scaff, executive vice president of Synergy said, “The 33% increase in our line of credit from Bank of Choice registers as a strong vote of confidence for our operations and strong growth potential. Since entering into our original line of credit with the bank, Synergy has participated in two horizontal wells, continued its 2012 drilling program drilling 39 wells so far this fiscal year with a 100% drilling success rate and acquired over 9,000 D-J Basin mineral acres that provide prospects for drilling horizontal wells into the Greenhorn and Niobrara formations. We look forward to maintaining and growing our successful relationship with Bank of Choice.”