Synergy Resources Corp. bumped up its budget for capital expenditures (capex) in 2016 and plans to deploy a second drilling rig in the Greater Wattenberg Field, while also reporting a 16% increase in its proved reserves.

Denver-based Synergy said it plans to spend $130-150 million on capex in 2016, which includes $100-120 million for operated horizontal wells, $25-20 million for land leasing and $3-5 million for discretionary seismic and other costs. The company said it plans to drill 55 gross (52 net) wells during the year, and projects daily production for 2016 will range from 11,000-12,000 boe/d.

By comparison, the company reported average daily production of 8,750 boe/d for the 12-month period that ended on Aug. 31, 2015.

Synergy said it plans to drill 10 gross (nine net) standard-length lateral wells at its Vista pad in 2016, plus another 14 gross (13.5 net) mid-length lateral wells at its Fagerberg pad. It also plans to drill 22 gross (20.5 net) long lateral wells from its Evans pad and nine gross (nine net) mid-length wells from its Williams pad. According to Synergy's investor presentation, the company considers a standard-sized lateral as one measuring less than 6,000 feet, while mid-length laterals are greater than 6,000 feet and long laterals are more than 9,000 feet.

Broken down by play, 13 of the 55 gross wells being drilled by Synergy will target the A bench of the Niobrara Shale, while 11 will be drilled into the Niobrara's B bench, 16 will target the C bench and the remaining 15 will be drilled into the Codell formation.

Synergy said it has completed drilling on its Vista pad, and completion activities there are scheduled for the spring. The company said its drilling rig is currently deployed on its Fagerberg pad, but once finished there it will move on to the Evans pad. "As the Evans drilling operations will encompass two adjoining pads and is within a municipality, [we anticipate] adding a second drilling rig to minimize the impact," the company said Monday.

Last June, the company announced preliminary plans to spend $250-300 million on capex in 2016. It was revised to $115-135 million in October.

"We have presented a capex budget that provides growth in production year/year while maintaining low leverage," said CEO Lynn Peterson. "We continue to maintain flexibility in our activity level and can adjust based upon prevailing commodity prices and anticipated rates of return. During this period of lower commodity prices we continue to maintain a strong balance sheet which could allow us to grow our acreage holdings and asset base should the right opportunity present itself."

Synergy said its proved reserves totaled 66 million boe at the end of 2015, according to Ryder Scott, its third party reserve engineer. That represents a 16% increase from the 57 million boe in proved reserves the company reported on Aug. 31, 2015. Synergy added that the PV-10 value of its total proved reserves was $438.1 million. Total proved reserves included about 26.4 million bbl of crude oil and condensate, and about 238.7 Bcf of natural gas.

The company holds about 41,000 net acres in the core Wattenberg area, which mostly lies in Colorado's Weld County but also includes portions of Adams, Boulder and Larimer counties. It also holds about 52,000 net acres to the east in its Wattenberg Extension Area, in Morgan and Weld counties.

Synergy's fiscal year calendar currently ends on Aug. 31, but the company is transitioning to one that ends on Dec. 31. Synergy plans to create a report over a four-month transitional period that ended on Dec. 31, 2015. The company will hold a conference call to discuss 1Q2016 on May 6.