In a note released early Monday morning, Stifel analyst Michael Scialla upgraded shares of Synergy Resources SYRG from Hold to Buy and maintained a $13 price target.
The upgrade comes amid "strong" well performance, which Scialla said suggest that a large portion of Synergy's acreage is located in the Wattenberg Middle Core than his prior estimates. Furthermore, he noted that Synergy's Middle Core wells have been outperforming expectations.
In addition to the better-than-expected well performance, Scialla noted that Synergy has pulled back 21 percent over the last month while the peer average pullback was only 13 percent.
Looking ahead, Scialla is forecasting year-over-year production growth of 109 percent in fiscal 2015. However, he did warn that concerns over a November 2014 vote to put stiffer regulations on Colorado's oil and gas production have weighed on the stock.
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