Synergy Resources Corporation Acquires 87 Producing Wells in the Wattenberg Field of the Denver-Julesburg Basin

DENVER, May 25, 2011 /PRNewswire/ -- Synergy Resources Corporation (OTCBB: SYRG), a domestic oil and gas exploration and production company focused in the Denver-Julesburg Basin, hosted a special meeting of shareholders at its corporate offices on Monday, May 23, 2011, pursuant to the proxy mailed to shareholders of record as of April 29, 2011. The primary purpose of the meeting was to vote on the acquisition of oil and gas properties from Petroleum Exploration and Management.

Petroleum Exploration and Management ("PEM") Asset Acquisition:

Synergy Resources Corporation recently executed a nonbinding letter of intent with Petroleum Exploration and Management (a company owned equally by Ed Holloway and William E. Scaff Jr., two of Synergy's principal officers). Over 99% of the shareholders voting on the proposal approved the acquisition for a total purchase price of $19 million. The purchase price included $10 million in cash, $3.8 million in the form of restricted shares of Synergy's common stock, and $5.2 million in the form of a promissory note.

The PEM assets consist of 87 producing oil and gas wells (40 net wells), one shut-in well, and oil and gas leases covering approximately 6,968 gross acres (4,554 net) in the D-J Basin.  Estimates of PEM's proved reserves, future production and cash flow attributable to PEM's assets as of January 1, 2011, are included in the tables below.

The completion of the PEM acquisition was contingent upon the following:

• the approval of the transaction by a majority of the Company's disinterested directors,
• the receipt of a "fairness opinion" concerning the price the Company plans to pay PEM for its oil and gas properties,
• the approval of the transaction by the vote of shareholders owning a majority of the shares in attendance at the meeting, whether in person or by proxy, with Mr. Holloway and Mr. Scaff not voting.

George Seward, Director and Acquisition Committee Chairman of Synergy Resources Corporation, commented, "We are pleased that 99.18% of the shareholder vote approved the acquisition of oil and gas assets from Petroleum Exploration and Management.  We feel the acquisition of forty net wells in the heart of the Wattenberg Field gives Synergy additional critical mass. These wells make great recompletion candidates to build reserves and production. This acquisition also provides additional horizontal Niobrara drilling locations. The proven reserves are being acquired at a discount to fair market value, and we look forward to developing these assets and creating value to our shareholders."    

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 continues to increase its acreage position in the Denver – Julesburg Basin with approximately 133,000 gross acres (117,000 net acres) under lease.  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.

SOURCE Synergy Resources Corporation

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