Why Synergy Resources Corp's Shares Popped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Synergy Resources Corp jumped as much as 12% briefly today after announcing a new drilling contract.

So what: Synergy has amended its turnkey drilling contract with Ensign United States Drilling to include Rig #131 for all of 2014. The rig is an automated drilling rig and is expected to help drilling proceed more efficiently and will allow for extended reach lateral wells.  

Now what: This is a nice addition to the drilling program and in 2014 we'll see if it translates to increased production. I'm not buying on this news alone and would like to see some improved financials before thinking too much of this deal. Investors are already expecting a lot of growth this year from Synergy and today's bump increases expectations even more.

A high potential play in energy
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

The article Why Synergy Resources Corp's Shares Popped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading