Denver’s Synergy Resources Corp. (NYSE: SYRG) will sell 10,000 net undeveloped acres outside its core Wattenberg area for $71 million to boost liquidity, the company said Jan. 12.

The acreage includes about 6.5% of the company’s production, an average 700 barrels of oil equivalent per day (boe/d), the company said.

Synergy had 69,300 core net acres in the Wattenberg Field and production of 10,794 boe/d as of Sept. 30. The company’s core area of operations is in the Wattenberg in northern Colorado, which is part of the Denver-Julesburg Basin.

The buyer was not disclosed. The divestiture, which is north of the company’s core development area, is set to close in first-quarter 2017.

“With the sale, Synergy's available liquidity expands to about $200 million at the end of 1Q17, including a $160 million borrowing base, which should be viewed as an incremental positive given $150 million of outspend seen in 2017 at strip,” said David Deckelbaum, an analyst at KeyBanc Capital Markets.

Synergy’s capex is budgeted for up to $300 million in 2017 compared with $145 million in 2016.

The acreage to be sold is in a very low gas-oil ratio (GOR) area north of SYRG's development window. It is not amenable to longer laterals due to scattered leases and was not contributing to KeyBanc’s valuation of the company.

The bigger focus for investors will be wells completed on the company’s Evans pad, with stock performance dependent on success there over the next three to six months, said David Tameron, senior analyst at Wells Fargo Securities.

The pad is located within the boundaries of Synergy’s $505 million Greeley Crescent acquisition. The acquisition, made in June from Noble Energy Inc. (NYSE: NBL), included 33,100 net acres and 800 boe/d of production in Weld County, Colo.

The company's drilling operations are progressing on schedule at the two Evans pads, where each of Synergy's operated rigs is scheduled to drill 11 wells.

Deckelbaum said he expects further acreage enhancements within Synergy’s core Greeley Crescent area while the company offloads noncore, non-contiguous acreage. Synergy plans to release its fourth quarter and year-end earnings on Feb. 23.

Lynn A. Peterson, chairman and CEO of Synergy, said selling a non-contiguous piece of acreage outside of its core area of development fortifies the company's balance sheet and helps consolidate its footprint.

“We will continue to pursue accretive opportunities that complement our high-quality acreage position, as well as divest of properties that are not in our drilling plans over the next several years,” said Peterson, who co-founded Kodiak Oil & Gas Corp.

Synergy also settled litigation related to wells drilled on the Wiedeman pad, which will allow completion crews to begin finishing wells starting in January.

Darren Barbee can be reached at dbarbee@hartenergy.com.