Synergy Resources acquires DJ Basin assets from Noble for US$505 million

Synergy Resources is buying 33,100 net acres in Weld County, Colorado from Noble Energy for US$505 million. Average net daily production on the acquired assets is approximately 2,400 barrels of oil equivalent per day. The acreage is largely undeveloped horizontally, but over 80% of the acquired lands are held by production from vertical wells. We value the position using our type curve assumptions for extended lateral development in the Greater Wattenberg sub-play. Our valuation is dependent upon Synergy's ability to optimize well spacing across the acquired acreage. While the base case valuation is quite close to the deal consideration, we believe that Synergy may have been willing to pay a premium to acquire acreage contiguous to their own in the heart of the Wattenberg Field. These opportunities are rare in the Wattenberg, as the acreage is largely held by few operators.