UPDATE: KeyBanc Initiates Coverage on Synergy Resources at Buy on Oil Growth, Wattenberg Inventory

In a report published Wednesday, KeyBanc analyst Jack N. Aydin initiated coverage on Synergy Resources Corp.

with a Buy rating and $8.50 price target. In the report, Aydin noted, “We are initiating coverage of Synergy Resources Corporation (SYRG-NYSE MKT) with a BUY rating and price target of $8.50/share, given our view that the Company has: 1) a low-risk path to top decile crude volume growth over the next several years; 2) exposure to significant near-term value-enhancing events in the Wattenberg core and extension; 3) a clean balance sheet with an expanding credit facility, and 4) is one of the least expensive ways to play the Wattenberg on an implied $/acre basis. Our price target of $8.50/share implies 20% upside potential to yesterday's closing price of $7.07/share. At the current share price, we believe the market is only giving SYRG shares credit for partial success in the Niobrara B bench in the core of the Wattenberg and no credit for the Codell or the NE Wattenberg Extension.” Synergy Resources Corp. closed on Tuesday at $7.07.