Synergy Resources Corp (SYRG) First Quarter 2015 Earnings Call Transcript

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Irene Haas, Wunderlich Securities
Okay, great. Thank you.

Operator
Thank you. Our next question is coming from the line of Ryan Oatman with SunTrust. Please proceed with your question.

Ryan Oatman, SunTrust
Hi, good morning.

Ed Holloway, President, Co-CEO
Good morning, Ryan.

Ryan Oatman, SunTrust
Most of my M&A and kind of well cost questions have been answered. You mentioned sort of at the script the operating and G&A cost, which were lower and certainly below my expectations this quarter. Should we look for lifting costs to stay in that kind of $4 barrel range or do you think the workovers, which will basically nail this quarter will kind of bring that back towards $5 barrel?

Craig Rasmuson, COO
It is probably realistically can be somewhere in the middle of that forecast — what we are doing out there and things that are needing attention and work over on it. Obviously, concretion and all that, is it a premium right now with the highline pressures we are experiencing? We feel like we have honed in on that. It is cyclical to when we turn wells on and within six weeks or so we are tubing them up. All of that is cyclical to our completions also. It is a good question.  We just, off the cut, right about in the middle of that is probably going to be where we land.

Ryan Oatman, SunTrust
Prefect. That makes sense, then just one quick follow-up on the new well design. I understand you are reducing the frack stage count but increasing the sand volume per stage. What I am unclear on is the net impact. Is that overall amount of sand per lateral foot, is that increasing or decreasing?

Craig Rasmuson, COO
It is increasing. Especially in the Niobrara, we have tracked a lot through the wells that we do have online. Then also wells that were non-operated into that we’ve got the inside information on the completion designs. We really feel getting into that 1,100/1,150 pounds per foot in the Niobrara, maybe even pushing 1,200 or 1,250 on some wells is what we are going to be looking at. The Codell is about staying normal about 900 pounds per foot, and we feel pretty good about the numbers we are making in the Codell.

Ryan Oatman, SunTrust
Great. That is it from me. Thank you.

Operator
Thank you. Our next question is coming from the line of David Deckelbaum with KeyBanc. Please proceed with your question.

David Deckelbaum, KeyBanc
Good morning, guys. Thanks for taking my questions. Just a little bit color on the $3.3 million on the recent AFE, does that also include the benefits already from turnkey versus day rate improvements on the drilling side?

Craig Rasmuson, COO
That is what the day rates. Yes, that’s couple of hundred thousand dollars savings per wells what we are forecasting. We go into day rate from the turnkey.

David Deckelbaum, KeyBanc
Okay.

Monty Jennings, CFO
That does include some vendors coming down in price but not all. We still got some realized savings coming forward, and that is why our goal is to get to $3 million.

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