UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

QUARTERLY  REPORT UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934

                   For the quarterly period ended May 31, 2009

TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934

                 For the transition period from _____ to _______

                       Commission File Number: 333-146561

                          SYNERGY RESOURCES CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

                     Colorado                         20-2835920
         (State or other jurisdiction of           (I.R.S. Employer
          incorporation or organization)          Identification No.)

                  20203 Highway 60, Platteville, Colorado 80651
               (Address of Principal Executive Offices) (Zip Code)

             Registrant's telephone number including area code:  (970) 737-1073

                                       N/A
     ----------------------------------------------------------------------
         Former name, former address, and former fiscal year, if changed
                                since last report

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the past 12 months (or for such shorter  period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.      Yes [x]        No

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Larger accelerated filer                     Accelerated filer
Non-accelerated filer                        Smaller reporting company  [x]

Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).      Yes         No [x]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 11,998,000 shares outstanding
as of July 2, 2009.



<PAGE>

                          SYNERGY RESOURCES CORPORATION

                                      Index

                                                                            Page
Part I - FINANCIAL INFORMATION

Item 1.    Financial Statements

           Balance Sheets as of May 31, 2009 (unaudited) and August 31,
           2008                                                               3

           Statements of Operations for the three months ended May 31,
           2009 and 2008 (unaudited)                                          4

           Statements of Operations for the nine months ended May 31, 2009, for
           the period from inception (December 28, 2007) to May 31, 2008, and
           for the period from inception (December 28, 2007) to May 31, 2009
           (unaudited)                                                        5

           Statements of Cash Flows for the nine months ended May 31, 2009, for
           the period from inception (December 28, 2007) to May 31, 2008, and
           for the period from inception (December 28, 2007) to May 31, 2009
           (unaudited)                                                        6

           Notes to Financial Statements (unaudited)                          7

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                             20

Item 4.    Controls and Procedures                                           27

Part II - OTHER INFORMATION

Item 1.    Legal Proceedings                                                 28

Item 2.    Unregistered Sales of Equity Securities and Use of
           Proceeds                                                          28

Item 3.    Defaults Upon Senior Securities                                   28

Item 4.    Submission of Matters to a Vote of Security Holders               28

Item 5.    Other Information                                                 28

Item 6.    Exhibits                                                          29

SIGNATURES                                                                   30


                                       2

<PAGE>

                          SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                                 BALANCE SHEETS

                                                         May 31,     August 31,
                                                          2009          2008
                                                       ------------ ------------
                                                       (Unaudited)
                               ASSETS
      Current assets:
       Cash and cash equivalents                       $ 1,052,985  $ 2,292,341
       Accounts receivable                                  25,928            -
       Other current assets                                 32,825       27,412
                                                       ------------ ------------
           Total current assets                          1,111,738    2,319,753
                                                       ------------ ------------

      Property and equipment, at cost:
        Oil and gas properties, full cost method, net    2,665,479            -
        Other property and equipment, net                    1,152            -
                                                       ------------ ------------
             Property and equipment, net                 2,666,631            -
                                                       ------------ ------------

      Other assets:
        Option to acquire mineral interests - related
         party                                              60,000            -
        Performance assurance deposit                       85,000            -
        Deferred offering costs                              5,000            -
                                                       ------------ ------------
              Total other assets                           150,000            -
                                                       ------------ ------------

             Total assets                              $ 3,928,369  $ 2,319,753
                                                       ============ ============

                LIABILITIES AND SHAREHOLDERS' EQUITY

      Current liabilities:
        Accounts payable                               $   577,087  $    12,473
        Accrued taxes and expenses                          45,378       40,853
        Bank loan payable                                1,161,811            -
        Accrued interestb                                    3,195            -
                                                       ------------ ------------
             Total current liabilities                   1,787,471       53,326
                                                       ------------ ------------

      Shareholders' equity:
        Preferred stock - $0.01 par value, 10,000,000
        shares authorized:
            no shares issued and outstanding                     -            -
        Common stock - $0.001 par value, 100,000,000
        shares authorized:
             10,601,334 and 9,943,571shares issued and
             outstanding at May 31, 2009 and August 31,
             2008, respectively                             10,601        9,944
        Additional paid-in capital                      13,428,773    2,477,511
        Stock subscriptions receivable                           -      (27,650)
        (Deficit) accumulated during the exploration
           stage                                       (11,298,476)    (193,378)
                                                       ------------ ------------
            Total shareholders' equity                   2,140,898    2,266,427
                                                       ------------ ------------
            Total liabilities and shareholders' equity $ 3,928,369  $ 2,319,753
                                                       ============ ============

   The accompanying notes are an integral part of these financial statements.




                                       3
<PAGE>

                          SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                            STATEMENTS OF OPERATIONS
                      for the three months ended May 31, 2009 and 2008
                                   (Unaudited)

                                                Three Months     Three Months
                                                    Ended            Ended
                                                 May 31, 2009     May 31, 2008
                                               ---------------  ---------------

  Oil and gas revenues                         $       28,832   $            -
                                               ---------------  ---------------

  Expenses:
    Lease operating expenses                            1,138                -
    Depreciation, depletion, and amortization          21,973                -
    Administrative services contract -
      related party                                    60,000                -
    Salaries and payroll taxes                        110,610                -
    Consulting fees - related party                    30,000                -
    Professional fees                                  33,430                -
    Insurance                                          12,306                -
    Share based compensation - stock
      options granted                               3,429,396                -
    All other general and administrative                4,033                -
                                               ---------------  ---------------
            Total expenses                          3,702,886                -
                                               ---------------  ---------------
      Operating (loss)                             (3,674,054)               -

      Interest income                                   1,924                -
                                               ---------------  ---------------

      (Loss) before taxes                          (3,672,130)               -

      Provision for income taxes                            -                -
                                               ---------------  ---------------
      Net (loss)                               $   (3,672,130)  $            -
                                               ===============  ===============
      Net (loss) per common share:
         Basic and Diluted                     $        (0.35)  $            -
                                               ===============  ===============
      Weighted average shares outstanding:
         Basic and Diluted                         10,531,051                -
                                               ===============  ===============

   The accompanying notes are an integral part of these financial statements.



                                       4
<PAGE>


                          SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                            STATEMENTS OF OPERATIONS
                     for the nine months ended May 31, 2009,
       for the period from Inception (December 28, 2007) to May 31, 2008,
      and for the period from Inception (December 28, 2007) to May 31, 2009
                                   (Unaudited)

                                                    Inception       Inception
                                   Nine Months    (December 28,   (December 28,
                                      Ended          2007) to        2007) to
                                   May 31, 2009    May 31, 2008    May 31, 2009
                                  --------------  --------------  --------------
Oil and gas revenues              $      28,832   $           -   $      28,832
                                  --------------  --------------  --------------
Expenses:
 Lease operating expenses                 3,712               -           3,712
 Depreciation, depletion, and
   amortization                          21,973               -          21,973
 Administrative services contract -
   related party                        180,000               -         233,333
 Salaries and payroll taxes             326,056               -         398,438
 Consulting fees - related party         90,000               -          90,000
 Professional fees                      174,486               -         215,584
 Insurance                               32,317               -          32,317
 Share based compensation - stock
   options granted                   10,282,000               -      10,310,200
 All other general and
   administrative                        36,952               -          38,210
                                  --------------  --------------  --------------
      Total expenses                 11,147,496               -      11,343,767
                                  --------------  --------------  --------------
Operating (loss)                    (11,118,664)              -     (11,314,935)

Interest income                          13,566               -          16,459
                                  --------------  --------------  --------------
(Loss) before taxes                 (11,105,098)              -     (11,298,476)

Provision for income taxes                    -               -               -
                                  --------------  --------------  --------------
Net (loss)                        $ (11,105,098)  $           -   $ (11,298,476)
                                  ==============  ==============  ==============

Net (loss) per common share:
  Basic and Diluted               $       (1.05)  $           -
                                  ==============  ==============

Weighted average shares outstanding:
  Basic and Diluted                  10,545,652               -
                                  ==============  ==============


   The accompanying notes are an integral part of these financial statements.



                                       5
<PAGE>


                          SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                            STATEMENTS OF CASH FLOWS
                     for the nine months ended May 31, 2009,
             for the period from Inception (December 28, 2007) to May 31, 2008,
           and for the period from Inception (December 28, 2007) to May 31, 2009
                                   (Unaudited)

                                                    Inception       Inception
                                   Nine Months    (December 28,   (December 28,
                                      Ended          2007) to        2007) to
                                   May 31, 2009    May 31, 2008    May 31, 2009
                                  --------------  --------------  --------------

 Cash flows from operating
 activities:
  Net (loss)                      $ (11,105,098)  $           -   $ (11,298,476)
                                  --------------  --------------  --------------
  Adjustments to reconcile
  net (loss) to net cash
  (used in) operating activities:
  Share based compensation           10,282,000               -      10,310,200
  Depreciation, depletion and
   amortization                          21,973               -          21,973
  Changes in operating assets and
   liabilities
  (Increase) in accounts receivable     (25,928)              -         (25,928)
  (Increase) in other current assets     (5,413)              -         (32,825)
  Increase in accounts payable          234,561               -         247,034
  Increase in accrued taxes and
   expenses                               4,525               -          45,378
  Increase in accrued interest            3,195               -           3,195
  Effect of merger on operating
   assets (liabilities)                 (31,438)              -         (31,438)
                                  --------------  --------------  --------------
  Total adjustments                  10,483,475               -      10,537,589
                                  --------------  --------------  --------------
 Net cash (used in) operating
  activities                           (621,623)              -        (760,887)
                                  --------------  --------------  --------------
Cash flows from investing
activities:
 Acquisition of property and
  equipment                          (2,279,426)              -      (2,279,426)
 Option to acquire mineral
  interests - related party            (100,000)              -        (100,000)
 Performance assurance deposit          (85,000)              -         (85,000)
 Cash acquired in merger                  3,987               -           3,987
                                  --------------  --------------  --------------
Net cash (used in) investing
activities                           (2,460,439)              -      (2,460,439)
                                  --------------  --------------  --------------
Cash flows from financing activities:
 Proceeds from bank loan payable      1,161,811               -       1,161,811
 Cash proceeds from sale of stock       957,295               -       3,502,900
 Offering costs                        (270,400)              -        (384,400)
 Payment of deferred offering costs      (5,000)              -          (5,000)
 Repurchase of shares                    (1,000)              -          (1,000)
                                  --------------  --------------  --------------
 Net cash provided by financing
 activities                           1,842,706               -       4,274,311
                                  --------------  --------------  --------------
Net increase (decrease) in cash
 and equivalents                     (1,239,356)              -       1,052,985

Cash and equivalents at beginning
 of period                            2,292,341               -               -
                                  --------------  --------------  --------------
Cash and equivalents at end
 of period                        $   1,052,985   $           -   $   1,052,985
                                  ==============  ==============  ==============
Supplemental Cash Flow Information:
 Interest paid                    $           -   $           -   $           -
                                  ==============  ==============  ==============
 Income taxes paid                $           -   $           -   $           -
                                  ==============  ==============  ==============
Non-cash investing and financing
activities:
 Net assets acquired in merger    $      11,675   $           -   $      11,675
                                  ==============  ==============  ==============

   The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

1.   Description of Business and Summary of Significant Accounting Policies

     Basis  of  Presentation:  Synergy  Resources  Corporation  (the  "Company")
represents  the result of a merger  transaction  on  September  10, 2008 between
Brishlin Resources, Inc. ("Predecessor Brishlin"), a public company, and Synergy
Resources Corporation ("Predecessor Synergy"), a private company. In conjunction
with the transaction, Predecessor Brishlin changed its name to Synergy Resources
Corporation and Predecessor Synergy changed its name to Synergy Resources,  Ltd.
The Company was organized  under the laws of the State of Colorado.  The Company
is in its  exploration  stage and  plans to engage in oil and gas  acquisitions,
exploration,  development and production  service  activities,  primarily in the
area known as the Denver-Julesburg Basin. The Company has adopted August 31st as
the end of its fiscal year.

     Interim Financial  Information:  The interim financial  statements included
herein have been prepared by the Company,  without audit,  pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") as promulgated
in Item 210 of Regulation  S-X.  Certain  information  and footnote  disclosures
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted in the United States of America ("US GAAP") have
been  condensed  or  omitted  pursuant  to such SEC rules and  regulations.  The
Company  believes  that  the  disclosures  included  are  adequate  to make  the
information  presented  not  misleading,  and  recommends  that these  financial
statements be read in  conjunction  with the audited  financial  statements  and
notes  thereto for the period ended  August 31, 2008,  included in our Report on
Form 8-K/A filed on November 26, 2008.

     In management's  opinion,  the unaudited  balance sheet as of May 31, 2009,
the  unaudited  statements  of  operations  for the three  month and nine  month
periods ended May 31, 2009,  and the  unaudited  statement of cash flows for the
nine month period ended May 31, 2009, contained herein, reflect all adjustments,
consisting  solely of normal recurring  items,  which are necessary for the fair
presentation of the Company's  financial  position,  results of operations,  and
cash  flows on a basis  consistent  with  that of its  prior  audited  financial
statements.  However,  the results of operations for interim  periods may not be
indicative of results to be expected for the full fiscal year.

     Reclassifications:  Certain amounts previously  presented for prior periods
have  been   reclassified  to  conform  with  the  current   presentation.   The
reclassifications   had  no  effect  on  net  loss,   total  assets,   or  total
shareholders' equity.

     Merger Transaction: On September 10, 2008, Predecessor Brishlin consummated
an  Agreement  to Exchange  Common  Stock  ("Exchange  Agreement")  with certain
shareholders  of  Predecessor  Synergy  to  acquire  approximately  89%  of  the
outstanding common stock of Predecessor Synergy. In subsequent transactions, all
the remaining  outstanding  common shares of Predecessor  Synergy were acquired.
Prior to September 10, 2008,  Predecessor  Brishlin had 1,038,000  common shares
outstanding,  and Predecessor  Synergy had 9,960,000 common shares  outstanding.


                                       7
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

The merger  transaction  resulted in the Company with  10,998,000  common shares
outstanding,  with the shareholders of Predecessor Synergy holding approximately
91% of the  outstanding  shares and the  shareholders  of  Predecessor  Brishlin
holding approximately 9% of the outstanding shares.

     The  Exchange  Agreement  further  provided  that the  Company  would issue
substitute  Series A  warrants  to  replace  similar  warrants  held by  certain
shareholders of Predecessor Synergy to purchase 2,060,000 shares of common stock
at $6.00 per share. Furthermore,  the Company agreed to issue substitute options
to replace similar options  outstanding prior to the merger  transaction,  which
options  provide for the purchase of  2,000,000  shares of common stock at $1.00
per share and 2,000,000 shares of common stock at $10.00 per share.

     Immediately  prior to the  transaction,  Predecessor  Brishlin  completed a
one-for-ten  reverse stock split of its outstanding  common stock. All share and
per share data  presented  in this  Report have been  retroactively  restated to
reflect the reverse stock split.

     In anticipation of the merger transaction,  Predecessor Brishlin declared a
dividend to its shareholders of record as of August 28, 2008,  consisting of one
Series A warrant for each common share held.

     Although  the legal form of the  transaction  reflects the  acquisition  of
Predecessor  Synergy by Predecessor  Brishlin,  the Company  determined that the
accounting form of the transaction is a "reverse  merger",  in which Predecessor
Synergy is  identified  as the  acquiring  company and  Predecessor  Brishlin is
identified as the acquired company. At the time of the transaction,  Predecessor
Brishlin had ceased most of its operations and liquidated most of its assets and
liabilities. In accordance with SEC regulations, the transaction was recorded as
a capital  transaction  rather than a business  combination.  The transaction is
equivalent  to the issuance of common stock by  Predecessor  Synergy in exchange
for the net assets of Predecessor Brishlin and a recapitalization of Predecessor
Synergy. The assets and liabilities of Predecessor Brishlin were not restated to
their  estimated fair market values and no goodwill or other  intangible  assets
were  recorded.   Selected  financial  data  for  Predecessor  Brishlin  at  the
transaction date follows:

      Selected Financial Data:

           Cash                                    $   3,986
           Current assets                              5,129
           Oil and gas assets                         39,125
           Current liabilities                        33,907
           Net assets                               $ 11,675

     Financial  information  for all periods  subsequent  to September  10, 2008
includes the combined  assets,  liabilities  and  activities of both  companies.
Historical  financial  information  for periods  prior to  September  10,  2008,


                                       8
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

presented for comparative purposes, includes only Predecessor Synergy.

     Condensed pro-forma  information  assuming that the transaction occurred on
September  1, 2008  (beginning  of  fiscal  year for the  Company)  has not been
presented.  As  Predecessor  Brishlin had  substantially  reduced its operations
prior  to  the  transaction,   there  is  no  material  difference  between  the
information presented in the financial statements and the pro-forma information.

     Oil and Gas Properties: The Company uses the full cost method of accounting
for  costs  related  to its oil  and  gas  properties.  Accordingly,  all  costs
associated  with  acquisition,  exploration,  and  development  of oil  and  gas
reserves  (including the costs of unsuccessful  efforts) are capitalized  into a
single full cost pool.  These costs include land acquisition  costs,  geological
and geophysical expense, carrying charges on non-producing properties,  costs of
drilling and overhead  charges  directly  related to acquisition and exploration
activities.

     All  capitalized  costs of oil and gas properties  are amortized  using the
unit-of-production   method  based  upon  estimates  of  proved  reserves.   For
amortization  purposes,  the volume of  petroleum  reserves  and  production  is
converted into a common unit of measure at the energy equivalent conversion rate
of six  thousand  cubic  feet  of  natural  gas  to one  barrel  of  crude  oil.
Investments in unevaluated  properties  and major  development  projects are not
amortized until proved  reserves  associated with the projects can be determined
or until impairment  occurs.  If the results of an assessment  indicate that the
properties  are  impaired,  the  amount  of  the  impairment  is  added  to  the
capitalized costs to be amortized.

     In applying the full cost method,  the  capitalized  costs are subject to a
quarterly  "ceiling  test".  If  capitalized  costs,  adjusted for such items as
accumulated  depletion and deferred income taxes,  exceed the "ceiling  amount",
the excess is charged to earnings as an  impairment  expense.  The  "ceiling" is
estimated as the present value,  discounted at 10%, of the future net cash flows
from proved oil and gas reserves plus the lower of cost or net realizable  value
of  unevaluated  properties.  The  calculation  of future net cash flows assumes
continuation of current economic conditions, including current prices and costs.
The  "ceiling"  is highly  sensitive  to changing  prices for oil and gas.  Once
impairment expense is recognized,  it cannot be reversed in future periods, even
if increasing prices raise the "ceiling amount".

     Revenue  Recognition:  Revenue is generally  recognized for the sale of oil
and gas when there is persuasive  evidence of a sale  arrangement,  delivery has
occurred,  the  price is  determinable,  and  collection  of sales  proceeds  is
reasonably  assured.  Revenue is accrued  when these four  conditions  have been
satisfied and reasonable  estimates can be made.  Revenue estimates are prepared
for the  quantity of petroleum  product  delivered to the customer and the price
that will be  received.  Payment is  received  at a later  date,  often sixty to
ninety days after  production.  Revenue accruals are adjusted to reflect updated
information as it is received.


                                       9
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

     Lease  Operating  Expenses:  Operating  expenses  of  producing  wells  are
recognized when incurred. For properties operated by third parties, expenses are
estimated based upon activity reports.  Expense accruals are adjusted to reflect
updated information as it is received.

     Per Share  Amounts:  SFAS  128,  "Earnings  per  Share,"  provides  for the
calculation  of "Basic" and  "Diluted"  earnings per share.  Basic  earnings per
share  include no dilution  and is computed by dividing  net income (or loss) by
the  weighted-average  number of shares outstanding  during the period.  Diluted
earnings per share reflect the potential dilution of securities that could share
in the earnings of the  Company,  similar to fully  diluted  earnings per share.
During the periods since inception, the Company has issued 7,801,334 potentially
dilutive  securities,  all of which were excluded from the  calculation  because
they were anti-dilutive.

     Use of Estimates:  The  preparation  of financial  statements in conformity
with US GAAP requires  management to make estimates and assumptions  that affect
the reported  amount of assets and  liabilities  and  disclosure  of  contingent
assets and liabilities at the date of the financial  statements and the reported
amounts of  revenues  and  expenses  during  the  reporting  period.  Management
routinely  makes  judgments and estimates  about the effects of matters that are
inherently uncertain. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the  circumstances,  the  results of which  form the basis for making  judgments
about the  carrying  values  of  assets  and  liabilities  that are not  readily
apparent from other sources.  Estimates and assumptions are revised periodically
and the effects of revisions are  reflected in the  financial  statements in the
period it is determined to be necessary.  Actual results could differ from these
estimates.

     Recent Accounting  Pronouncements:  On December 29, 2008, the SEC announced
final  approval of new  requirements  for  reporting  oil and gas reserves to be
effective  in  January  2010.  The  new  disclosure   requirements  provide  for
consideration  of new  technologies in evaluating  reserves,  allow companies to
disclose their probable and possible  reserves to investors,  report oil and gas
reserves  using an average  price based on the prior 12 month period rather than
year-end  prices,  and  revise  the  disclosure  requirements  for  oil  and gas
operations. The accounting for the limitation on capitalized costs for full cost
companies  will also be revised.  The new rule is expected to be  effective  for
years  ending on or after  December 31, 2009,  although  the  transition  may be
extended.  The  Company  has not yet  evaluated  the  effects  on its  financial
statements and disclosures.

     In  May  2009  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards No. 165, "Subsequent Events" (SFAS
165). SFAS 165 establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before  financial  statements
are issued or are available to be issued. It requires the disclosure of the date
through which an entity has evaluated  subsequent  events and the basis for that
date.  This  disclosure  should alert all users of financial  statements that an
entity  has  not  evaluated  subsequent  events  after  that  date in the set of
financial  statements  being  presented.  SFAS 165 is effective  for interim and
annual  periods  ending  after June 15,  2009.  The  adoption of SFAS 165 is not


                                       10
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

expected to have a material impact on the Company's financial statements.

     There were various other accounting  standards and  interpretations  issued
recently,  none  of  which  are  expected  to a have a  material  impact  on the
Company's financial position, operations or cash flows.

2.   Going Concern

     The Company's  financial  statements are prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of obligations
in the normal  course of  business.  Only  recently  has the  Company  commenced
revenue generating  operations and it has financed operations  primarily through
the sale of equity. The Company recently was successful in obtaining a bank loan
secured by oil and gas  equipment.  The Company has  incurred  losses  since its
inception  aggregating  $11,298,476.  These conditions raise  substantial  doubt
about the ability of the Company to continue as a going concern.

     The Company has raised cash proceeds of $3,112,500,  net of offering costs,
in sales of common  stock since  inception.  Management  believes  that the cash
balances  of  $1,052,985  at May 31,  2009  will not be  sufficient  to fund its
operating  activities and other capital  resource demands during the next twelve
months.

     The Company's ability to continue as a going concern is contingent upon its
ability to raise  additional  funds,  such as (1)  through the sale of equity or
sale of its  assets,  (2) joint  venture  or  partnership  arrangements,  or (3)
issuing debt instruments,  and ultimately attaining profitable  operations.  The
financial   statements  do  not  include  any  adjustments  to  the  amount  and
classification  of assets  and  liabilities  that may be  necessary  should  the
Company not continue as a going concern.

3.   Property and Equipment

     Oil and gas property  consists of various  interests in oil and gas leases,
two  wells,  one of which  is  operating  and one of which is in the  completion
stage, and tubular goods to be used in the development of future wells.

     In November  2008,  the Company  participated  in an auction of oil and gas
leases  conducted by the State of Colorado and was awarded leases to 1,600 acres
for total  consideration  of $113,600.  The leases have a term of five years. In
February 2009, the Company participated in an auction of leases conducted by the
Bureau  of Land  Management  and was  awarded  leases  to 2,000  acres for total
consideration of $45,000.  The leases have a term of ten years. The Company also
acquired several leases in private  transactions  covering  approximately  3,000
acres for total  consideration  approximating  $136,000.  The leases  have terms


                                       11
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

ranging  from  two to five  years.  As of May 31,  2009,  these  leases  covered
approximately  6,700 net acres,  and none of them were included in the full cost
pool subject to amortization.

     The  Company  has an option to  acquire  working  interests  in oil and gas
leases  currently owned by related parties PM and PEM as described in Note 7. In
connection therewith,  the Company recently participated in two wells drilled by
Kerr-McGee  Oil & Gas  Onshore  LP  ("KM").  As of May 31,  2009,  one  well was
operating  and one well was in the  completion  stage.  The  Company has a 37.5%
working interest (28.125% net revenue interest) in each well.

     Property and equipment at May 31, 2009, consisted of the following:

      Oil and Gas Properties, full cost method:
       Unevaluated costs, not subject to amortization:
            Acquisition and other costs                         $    355,992
            Tubular goods                                          1,718,968
            Well in progress                                         287,934
                                                                  ----------
               Subtotal, unevaluated costs                         2,362,894
                                                                   ---------

         Evaluated costs                                             324,373
            Less, accumulated depletion                              (21,788)
                                                                  -----------
               Subtotal, evaluated costs                             302,585
                                                                  ----------
                  Oil and gas properties, net                      2,665,479
                                                                   ---------

      Other property and equipment:
         Office equipment                                              1,337
            Less, accumulated depreciation                               (185)
                                                                 -------------
                  Other property and equipment, net                     1,152
                                                                 ------------

      Total Property and Equipment, net                          $   2,666,631
                                                                 =============


      The Company commenced depletion of its full cost pool during the three
months ended May 31, 2009. Costs of oil and gas properties are depleted using
the unit of production method based on estimated reserves. Production volumes
for the quarter are compared to estimated total reserves to calculate a
depletion rate. For the nine months ended May 31, 2009, depletion of oil and gas
properties was $21,788 and depreciation of other property and equipment was
$185.


                                       12
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

4.   Bank Loan Payable

     The Company  entered into a credit  facility  with a commercial  bank.  The
borrowing  arrangement  provides for maximum  borrowings up to $1,161,811 and is
collateralized  by tubular goods and certain other  assets.  The maximum  amount
that can be borrowed is reduced by usage or sale of the tubular goods.  The loan
bears interest at the prime rate plus 1/2%,  payable  quarterly,  with a minimum
interest rate of 5.5%. The loan maturity date is May 8, 2010.  Interest costs of
$3,195 and loan fees of $5,917  were  incurred  during the period  ended May 31,
2009.

     The Company  capitalizes  interest on expenditures  made in connection with
exploration   and   development   projects  that  are  not  subject  to  current
amortization. Interest is capitalizable during the period that activities are in
progress to bring the  projects to their  intended  use.  During the nine months
ended May 31,  2009,  interest  expense of  $9,112,  including  loan  fees,  was
capitalized.

5.   Shareholders' Equity

     Preferred Stock The Company has authorized  10,000,000  shares of preferred
stock with a par value of $0.01 per share.  These shares may be issued in series
with such rights and preferences as may be determined by the Board of Directors.
Since inception, the Company has not issued any preferred shares.

     Common Stock The Company has authorized  100,000,000 shares of common stock
with a par value of $0.001 per share.

     Issued and Outstanding The total issued and outstanding common stock at May
31, 2009 is 10,601,334 common shares, as follows:

     i.   Effective June 11, 2008, the Company issued 7,900,000 common shares to
          its founders at $0.001 per share, for aggregate proceeds of $7,900.

     ii.  Pursuant to a Private  Offering  Memorandum  dated June 20, 2008,  the
          Company sold 1,000,000  units at $1.00 per unit. Each unit consists of
          one share of  restricted  common  stock and one Series A warrant  that
          entitles the holder to purchase one share of common stock at $6.00 per
          share through December 31, 2012.

     iii. Pursuant to a Private  Offering  Memorandum  dated July 16, 2008,  the
          Company sold 1,060,000 units at $1.50 per unit for total cash proceeds
          of  $1,590,000.  Each unit consists of one share of restricted  common
          stock and one Series A warrant  that  entitles  the holder to purchase
          one share of common  stock at $6.00 per  share  through  December  31,
          2012.


                                       13
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

     iv.  Effective  September 10, 2008, the Company  agreed to issue  1,038,000
          common  shares to the  shareholders  of  Predecessor  Brishlin,  on an
          exchange  basis of one share of Synergy common stock for each share of
          Brishlin  common stock. In addition,  the  shareholders of Predecessor
          Brishlin  will receive  1,038,000  Series A warrants  that entitle the
          holder  to  purchase  one  share of  common  stock at $6.00  per share
          through December 31, 2012.

     v.   Effective December 1, 2008, the Company  repurchased  1,000,000 shares
          of its  common  stock  from one of the  original  Predecessor  Synergy
          shareholders for $1,000, the price at which the shares were originally
          sold to the shareholder.

     vi.  Pursuant to a Private Offering  Memorandum dated December 1, 2008, the
          Company sold 301,667  units at $3.00 per unit for total cash  proceeds
          of $905,001.  Offering costs  associated with the offering  aggregated
          $275,400,  resulting  in net cash  proceeds  of  $629,601.  Each  unit
          consists of two shares of common  stock,  one Series A warrant and one
          Series B  warrant.  Each  Series A  warrant  entitles  the  holder  to
          purchase one share of common stock at a price of $6.00 per share.  The
          Series A warrants  expire on  December  31,  2012,  or  earlier  under
          certain  conditions.  Each  Series B warrant  entitles  the  holder to
          purchase one share of common stock at a price of $10.00 per share. The
          Series B warrants  expire on  December  31,  2012,  or  earlier  under
          certain conditions.

     The following tables summarize  information  about the Company's issued and
outstanding common stock warrants for the period ended May 31, 2009:

                                                                     Exercise
                                                      Remaining     Price times
                                         Number of    Contractual      Number
                        Exercise Price    Shares    Life (in years)  of Shares
                        --------------   ---------  --------------- -----------

                            $ 6.00       3,399,667        3.5       $20,398,002
                            $10.00         301,667        3.5       $ 3,016,670


                                             Number of    Weighted average
                                              warrants     exercise price
                                             ---------    -----------------

       Outstanding, August 31, 2008          2,043,571            $6.00
       Granted                               1,657,763            $6.73
       Exercised                                    --               --
                                           ------------        ---------
       Outstanding, May 31, 2009             3,701,334            $6.33
                                           ============        =========


                                       14
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)


6.   Stock Based Compensation

     The  Company  accounts  for stock  options  activities  as provided by SFAS
123(R),  "Share-Based  Payment,"  which  requires  the  Company  to  expense  as
compensation  the value of grants and options as determined  in accordance  with
the fair value based method prescribed in SFAS 123(R). The Company estimates the
fair   value  of  each   stock   option   at  the   grant   date  by  using  the
Black-Scholes-Merton option-pricing model.

     As described in the following paragraphs,  the Company recorded stock-based
compensation expense of $10,282,000 for the nine months ended May 31, 2009.

     During June 2008,  stock options were granted to purchase  4,000,000 shares
of common stock.  Effective June 11, 2008, grants covering 2,000,000 shares were
issued to the  executive  officers at an exercise  price of $10.00 and a term of
five years, and these options will vest over a one-year  period.  The fair value
of these options was determined to be nil based upon the following  assumptions:
expected  life of 2.5  years,  stock  price of $1.00 at date of  grant,  nominal
volatility, dividend yield of 0%, and interest rate of 2.63%. Effective June 30,
2008,  grants  covering  an  additional  2,000,000  shares  were  issued  to the
executive  officers at an exercise price of $1.00 and a term of five years,  and
these  options  will  vest  over a  one-year  period.  Based  upon a fair  value
calculation, these options were determined to have a value of $127,000 using the
following assumptions:  expected life of 2.5 years, stock price of $1.00 at date
of grant, nominal volatility,  dividend yield of 0%, and interest rate of 2.63%.
Stock option  compensation  expense of $88,920 was  allocated to the nine months
ended May 31,  2009,  based on a  pro-ration  of the fair value over the vesting
period.

     In  connection  with the merger,  the Company  agreed to issue stock option
grants covering 4,000,000 shares to replace the similar options described in the
preceding paragraph.  Using the  Black-Scholes-Merton  option-pricing model, the
Company  estimated that the fair value of the replacement  options  exceeded the
fair value of the options  surrendered by $10,185,345.  The assumptions  used in
the model  were:  expected  life of 2.5 years,  stock  price of $3.50 at date of
grant, volatility of 166%, dividend yield of 0%, and interest rate of 2.63%. The
incremental  expense of  $10,185,345  was pro-rated  over the vesting period and
stock  option  compensation  expense for the nine months  ended May 31, 2009 was
$10,185,345.

     Effective  December  31,  2008,  the Company  granted  stock  options to an
employee  to purchase  100,000  shares of common  stock at an exercise  price of
$3.00 and a term of ten years.  These options will vest over a five year period.
Based on a fair value calculation, these options were determined to have a value
of $185,640  using the following  assumptions:  expected life of 5 years,  stock
price of $2.00 at date of grant,  volatility of 166%,  dividend yield of 0%, and
interest rate of 3.13%. Stock option compensation expense of $7,735 was recorded
for the period ended May 31, 2009,  based on a pro-ration of the fair value over
the vesting period.


                                       15
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

      The estimated unrecognized compensation cost from unvested stock options
as of May 31, 2009 was approximately $187,785, which will be recognized ratably
through December 31, 2013.

      The following tables summarize information about stock options for the
period ended May 31, 2009:

                              Remaining     Exercise      Weighted
                             Contractual   Price times    Average
                 Number of     Life (in     Number of     Exercise
Exercise Price    Shares        years)       Shares         Price
---------------------------------------------------------------------

   $ 10.00       2,000,000       4.3      $  20,000,000       $10.00
   $  1.00       2,000,000       4.3          2,000,000       $ 1.00
   $  3.00         100,000       9.5            300,000       $ 3.00
                ----------                -------------
                 4,100,000                $  22,300,000       $ 5.44
                 =========                =============


                                   Number of      Weighted average
                                    shares         exercise price

Outstanding, August 31, 2008      4,000,000              $5.50
Granted                           4,100,000              $5.44
Terminated                      (4,000,000)              $5.50
                                ----------
Outstanding, May 31, 2009        4,100,000               $5.44
                                ==========
Exercisable at June 30, 2009    4,000,000
                                ==========

7.   Related Party Transactions and Commitments

     The  Company's  executive  officers  control two entities that have entered
into agreements  with the Company.  The entities are Petroleum  Management,  LLC
("PM") and Petroleum  Exploration  and  Management,  LLC ("PEM").  One agreement
provides various administrative  services to the Company and the other agreement
provides an option to acquire certain oil and gas interests.

     For the nine months ended May 31, 2009, the Company paid $180,000 under the
administrative services agreement.

     Effective  August 7, 2008, the Company entered into a letter of intent with
the related entities that provides an option to acquire working interests in oil
and gas leases  which are owned by PM and/or PEM.  The oil and gas leases  cover
640 acres in Weld County,  Colorado, and subject to certain conditions,  will be
transferred  to the  Company for  payment of $1,000 per net  mineral  acre.  The


                                       16
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

working interests in the leases vary but the net revenue interest in the leases,
if acquired by the Company,  will not be less than 75%. The letter of intent, as
amended, has an expiration date of August 31, 2009.

     Effective  May 13,  2009,  the  Company  acquired  oil  and  gas  equipment
consisting of casing and tubing from PM. PM was paid $1,718,967 as reimbursement
for the original cost of the tubular goods

     On June 11, 2008, the Company entered into two year  employment  agreements
with its  executive  officers.  Pursuant to the terms of those  agreements,  the
salaries of William E. Scaff,  Jr. and Ed Holloway  are each  $12,500 per month.
For the nine months ended May 31, 2009,  the Company paid  $225,000  under these
agreements.

     In June 2008, the Company sold 1,900,000  shares of its common stock to the
Synergy  Energy  Trust (the  "Trust").  The Trust was created for the benefit of
consultants and others who have, or will in the future, benefit the Company. The
trustee is a shareholder of the Company. Effective December 1, 2008, the Company
repurchased  1,000,000 shares of its common stock from the Trust for $1,000, the
original  selling  price.  During the nine months  ended May 31,  2009,  900,000
shares  were issued to the Trustee in  exchange  for certain  services  directly
related  to  raising  additional  capital  for  the  Company,  and  the  Trustee
terminated the Trust.

     On June 1, 2008, the Company  entered into an agreement with Energy Capital
Advisors,  an entity related through common ownership interests.  Energy Capital
Advisors  provided  certain  services  directly  related to  raising  additional
capital for the Company.  Compensation under the agreement was $30,000 per month
through December 31, 2008, and $10,000 per month from January 1, 2009 to May 31,
2009, when the agreement terminated.  During the nine months ended May 31, 2009,
the Company paid $170,000 related to this agreement.

     On June 1, 2008, the Company  entered into an agreement with J3 Energy LLC,
an entity related through common ownership interests. Pursuant to the Agreement,
J3 Energy LLC agreed to provide  certain  services  directly  related to raising
additional  capital for the Company.  The agreement  terminated on September 30,
2008.  Compensation  under the agreement  was $8,000 per month.  During the nine
months ended May 31, 2009, the Company paid $8,000 related to the agreement.

     In connection  with the merger,  the Company entered into an agreement with
two directors to provide consulting services.  The initial term of the agreement
is one year.  Compensation under the agreement is $10,000 per month.  During the
nine months ended May 31, 2009, the Company recorded costs of $90,000 related to
this agreement.


                                       17
<PAGE>

                         SYNERGY RESOURCES CORPORATION
                         (An Exploration Stage Company)
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 2009
                                  (Unaudited)

8.   Subsequent Events

     Effective  June  29,  2009,  the  Company  completed  the  private  sale of
1,000,000  units at a price of $3.00 per unit. Each unit consisted of two shares
of the Company's  common  stock,  one Series A Warrant and one Series B warrant.
The sale of 1,000,000  units  included  301,667  units sold on or before May 31,
2009 and 698,333 units sold subsequent to May 31, 2009.




                                       18
<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation

Overview

     The following  discussion updates our plan of operation for the next twelve
months. It also analyzes our financial condition at May 31, 2009 and compares it
to  our  financial  condition  at  August  31,  2008.  Finally,  the  discussion
summarizes  the results of our  operations  for the three months and nine months
ended May 31, 2009.  This  discussion and analysis should be read in conjunction
with our audited  financial  statements  for the period  ended  August 31, 2008,
including  footnotes  thereto,  and the discussion and analysis  included in our
reports as filed with the SEC.

Merger  Transaction  Between  Brishlin  Resources,  Inc.  and Synergy  Resources
Corporation

     Synergy Resources Corporation represents the result of a merger transaction
between Brishlin Resources, Inc. ("Predecessor Brishlin"), a public company, and
Synergy Resources  Corporation  ("Predecessor  Synergy"),  a private company. In
conjunction  with the  transaction,  Predecessor  Brishlin  changed  its name to
Synergy  Resources  Corporation  and  Predecessor  Synergy  changed  its name to
Synergy Resources, Ltd.

     On September 10, 2008,  Predecessor  Brishlin  consummated  an Agreement to
Exchange  Common  Stock  ("Exchange  Agreement")  with certain  shareholders  of
Predecessor Synergy to acquire approximately 89% of the outstanding common stock
of  Predecessor  Synergy.  In  subsequent  transactions,  all of  the  remaining
outstanding  common  shares  of  Predecessor  Synergy  were  acquired.  Prior to
September 10, 2008, Predecessor Brishlin had 1,038,000 common shares outstanding
and  Predecessor  Synergy had 9,960,000  common shares  outstanding.  The merger
transaction  resulted in an entity with 10,998,000 shares outstanding,  with the
shareholders of Predecessor Synergy holding approximately 91% of the outstanding
shares and the shareholders of Predecessor Brishlin holding  approximately 9% of
the outstanding shares.

     As additional  consideration  in the  transaction,  the Exchange  Agreement
required  Predecessor  Brishlin to issue 2,060,000  Series A warrants to certain
shareholders  of  Predecessor  Synergy to replace  similar  warrants  previously
issued by  Predecessor  Synergy.  Each Series A warrant  entitles  the holder to
purchase one share of common stock at an exercise price of $6.00 per share.

     Although  the legal form of the  transaction  reflects the  acquisition  of
Predecessor Synergy by Predecessor  Brishlin,  we determined that the accounting
form of the transaction is a "reverse merger",  in which Predecessor  Synergy is
identified as the acquiring  company and  Predecessor  Brishlin is identified as
the acquired company. Furthermore, since Predecessor Brishlin had ceased most of
its  activities  as of the merger  date,  the  transaction  was not treated as a
business combination pursuant to Statement of Financial Accounting Standards No.
141, but as a capital  transaction  whereby  common stock was issued for the net
assets of Predecessor Brishlin accompanied by a simultaneous recapitalization of
Predecessor Synergy. No goodwill or other intangible assets were recorded in the
transaction.


                                       19
<PAGE>

     Financial  information  for all periods  subsequent  to September  10, 2008
includes the combined  assets,  liabilities  and  activities of both  companies.
Historical  financial  information  for periods  prior to  September  10,  2008,
presented for comparative purposes, includes only Predecessor Synergy.

     At the date of the Exchange Agreement,  Predecessor Synergy's primary asset
was approximately $2,200,000 in cash that it had raised from sales of its common
stock to private investors. Predecessor Brishlin's primary asset was an interest
in one shut-in well located in northeastern Colorado.

Plan of Operation

     We plan to become an  independent  oil and gas  exploration  and production
company, engaged in the acquisition of mineral interests and the exploration and
development of crude oil and natural gas reserves and production.  Our executive
officers have  extensive  experience in drilling wells and producing oil and gas
in the Denver-Julesburg  Basin (D-J Basin) located in northeastern  Colorado and
neighboring states. The D-J Basin has many positive attributes that we intend to
exploit.  The area has a long history of successful oil and gas operations,  and
features low drilling and completion costs, high level of predictability,  rapid
return on  investment,  and numerous  drilling  opportunities.  New drilling and
completion  technology has greatly improved the ability to extract  hydrocarbons
from mineral  rich  formations.  We have  developed a plan to utilize a drilling
program in proven  areas  with a  relatively  predictable  return and a low risk
history.

     As an oil and gas  company,  our  strategy  will be to identify and exploit
mineral interests in areas that are proximate to existing or indicated producing
areas based on the results of other drilling activity in the area. These targets
can be quickly  developed  and put into  production as low cost and low risk. We
believe that the  experience of our  executive  officers will provide us with an
advantage in quickly acquiring  prospects in promising areas in an efficient and
cost effective manner.

     To fund our  operations,  we plan to sell  additional  shares of our common
stock and warrants.

     We have an option to  acquire  interests  in mineral  properties  currently
owned  by  Petroleum  Management,  LLC  ("PM")  and  Petroleum  Exploration  and
Management, LLC ("PEM"), companies controlled by our executive officers. The two
entities have acquired the rights to several  mineral  interests and have agreed
to assign  certain  interests to us for payment of $1,000 per mineral acre.  The
option required an initial payment of $100,000 which will be applied against the
mineral  interests as they are  assigned to us. As of May 31, 2009,  $40,000 had
been applied to mineral interests acquired from PM and PEM.

     Pursuant  to the  option  agreement  with PM and PEM  described  above,  we
recently  participated  in two wells drilled by Kerr-McGee  Oil & Gas Onshore LP
("KM"). Both the Gray #25-16 well and the Zabka State #33-15 well hit productive
formations at a depth of  approximately  7,500 feet. As of May 31, 2009 one well


                                       20
<PAGE>

was operating and one well was in the completion  stage. We have a 37.5% working
interest (28.125% net revenue interest) in each well.

     In  November,  2008,  we  participated  in an auction of oil and gas leases
conducted  by the State of Colorado.  We were awarded  leases to 1,600 acres for
total  consideration  of  $113,600.  The leases  have a term of five  years.  In
February,  2009, we participated in an auction of leases conducted by the Bureau
of  Land   Management.   We  were  awarded  leases  to  2,000  acres  for  total
consideration of $45,000.  The leases have a term of ten years. In addition,  we
acquired several leases in private transactions.  The leases cover approximately
3,000  acres for total  consideration  approximating  $136,000.  The leases have
terms ranging from two to five years.  As of May 31, 2009,  these leases covered
approximately  6,700 net acres,  and none of them were included in the full cost
pool subject to amortization.

     Future Capital  Expenditures.  Our capital  expenditure  plans for the next
twelve  months  include  participation  in 23 gross wells (in which our interest
will  approximate  14 net wells) and various  other  projects for total costs of
$8,000,000 to $9,000,000.  As total capital expenditure plans exceed our capital
resources, we plan to seek additional funding sources. Capital expenditure plans
are subject to periodic  revision based upon  availability of funds and expected
return on investment.

     Exploration  Stage Company.  We are considered an exploration stage company
for  accounting  purposes.  We are unable to predict with any degree of accuracy
when that classification will change. We expect to incur losses until such time,
if ever, we begin generating significant revenue from operations.

     Going Concern.  The report of our independent  registered public accounting
firm on our audited  financial  statements  as of August 31, 2008  contained  an
explanatory  paragraph expressing  significant  uncertainty about our ability to
continue as a going  concern.  The factors that  contribute to this  uncertainty
include  our  status  as  an  exploration  stage  company,  our  need  to  raise
significant  additional  capital to fund our business  plan,  and the  operating
losses that we have incurred since inception.

Liquidity and Capital Resources

     Our business will be capital  intensive.  Our primary cash needs will be to
fund operating  expenses and capital  expenditures  related to the  acquisition,
exploration and development of crude oil and natural gas properties. Our ability
to execute our plan is dependent upon a number of factors,  including the amount
of capital that is raised in the coming months.

     We plan to  obtain  more  funding  in the next 12 months  to  continue  our
business operations.

     We recently  entered into a credit  arrangement with a commercial bank. The
borrowing  arrangement  provides for maximum  borrowings up to $1,161,811 and is
collateralized by tubular goods and certain other assets.  The maximum allowable
borrowing  amount is reduced  by usage or sale of the  tubular  goods.  The loan
bears interest at the prime rate plus 1/2%, payable  quarterly,  and was 5.5% as


                                       21
<PAGE>

of May 31, 2009. The loan maturity date is May 8, 2010.

     We may try to obtain additional credit facilities in the future. During the
last several months, the credit markets have undergone  significant  volatility.
Many  financial  institutions  have  liquidity  concerns,  prompting  government
intervention to mitigate  pressure on the credit markets.  These disruptions may
affect our ability to obtain  capital  resources and to finance our  operations.
Due to the  uncertainty  in the credits,  we are unable to predict if we will be
able to obtain additional  financing on terms and conditions that are acceptable
to us.

     The  most  significant  of our  future  expenditures  include  (i)  capital
expenditures   described  above  for  exploration  and  development;   and  (ii)
approximately $100,000 per month for operating expenses,  including salaries and
other corporate overhead.

     Capital resources to date have been provided  primarily through the sale of
equity  securities.  From  inception  through May 31,  2009,  we  received  cash
proceeds of $3,502,900 from the sale of our common stock,  offset by the payment
of offering costs of $389,400 and the  repurchase of 1,000,000  shares of common
stock from the original shareholder for $1,000.

     On June 29,  2009,  we completed  the private sale of 1,000,000  units at a
price of $3.00 per unit. Each unit consisted of two shares of common, one Series
A warrant and one Series B warrant.

     Cash  and  cash  equivalents.  As of May 31,  2009,  we had  cash  and cash
equivalents  on hand of  $1,052,985.  From time to time,  our cash  balances may
exceed the limits of federal deposit insurance. We attempt to limit this risk by
maintaining our cash deposits in a financial  institution which we believe to be
financially strong.

     Working  capital.  As of May 31, 2009, we had a working  capital deficit of
$(675,733), comprised of current assets of $1,111,738 and current liabilities of
$1,787,471.  Our working capital declined by $2,942,160 from the working capital
balance  of  $2,266,427  as of August 31,  2008.  Consistent  with our plan,  we
utilized  working  capital in our operations and for the  acquisition of oil and
gas properties.

     Operating activities. Net cash used in operating activities during the nine
months ended May 31, 2009 was $291,570.  We expect to continuing  consuming cash
in operations until such time, if ever, that we are able to generate significant
revenue from the sale of oil and gas.

     Investing  activities.  During the nine months ended May 31, 2009,  we used
$2,790,492 in investing activities, primarily consisting of expenditures for the
acquisition  of oil and gas  properties,  including the  acquisition  of tubular
goods of $1,718,968.

     Financing activities. Cash provided by financing activities during the nine
months ended May 31, 2009 was  $1,842,706,  consisting of proceeds from the sale
of common stock of $957,295, offset by offering costs of $275,400 and repurchase
of shares for $1,000.  In  addition,  we received  proceeds  from a bank loan of
$1,161,811.


                                       22
<PAGE>

     Off Balance Sheet  Financing.  As of and subsequent to May 31, 2009, we had
no off balance sheet arrangements.

     It is expected that the  principal  source of future cash flow will be from
the  production  and sale of crude oil and natural gas from  reserves  which are
depleting assets. Cash flow from the sale of oil and gas production depends upon
the  quantity  of  production  and the price  obtained  for the  production.  An
increase in prices will permit us to finance operations to a greater extent with
internally  generated funds, may allow us to obtain equity financing more easily
or on better  terms,  and lessens the  difficulty of obtaining  debt  financing.
However,  price  increases  heighten the  competition for oil and gas prospects,
increase the costs of exploration  and  development,  and,  because of potential
price  declines,  increase the risks  associated  with the purchase of producing
properties during times that prices are at higher levels.

     A decline in oil and gas prices  (i) will  reduce the cash flow  internally
generated,  which in turn will reduce the funds  available for exploring for and
replacing oil and gas reserves,  (ii) will increase the  difficulty of obtaining
equity and debt  financing  and worsen the terms on which such  financing may be
obtained,  (iii)  will  reduce the  number of oil and gas  prospects  which have
reasonable  economic  terms,  (iv) may cause us to permit leases to expire based
upon the value of  potential  oil and gas  reserves  in relation to the costs of
exploration,  (v) may result in  marginally  productive  oil and gas wells being
abandoned as  non-commercial,  and (vi) may increase the difficulty of obtaining
financing.  However,  price  declines  reduce  the  competition  for oil and gas
properties and correspondingly reduce the prices paid for leases and prospects.

     It is our plan to generate profits by drilling productive oil or gas wells.
However, we will need to raise the funds required to drill new wells through the
sale of equity securities,  from loans from third parties, or from third parties
willing to pay our share of drilling and well  completion  costs. We do not have
any  commitments  or  arrangements  from  any  person  to  provide  us with  any
additional capital. If additional financing is not available when needed, we may
need to curtail or cease  operations.  We may not be  successful  in raising the
capital needed to drill oil or gas wells. Any wells which may be drilled may not
be productive of oil or gas.

Results of Operations

     We are in the early stages of implementing our business plan. For financial
reporting  purposes,  our  inception  date was December  28, 2007,  the day that
Predecessor  Synergy  was  incorporated  in the State of  Colorado.  Although we
incorporated in 2007, we did not commence  business  activities until June 2008.
Accordingly, this discussion does not address historical comparative amounts for
periods prior to June 2008.

Three Months Ended May 31, 2009

     For the  three  months  ended  May 31,  2009,  we  recorded  a net  loss of
$(3,672,130), or $(0.35) per share.

     Revenues for the three months ended May 31, 2009 were $28,832, representing
oil sales of $22,214  (619 bbls at an average  price of $35.89) and gas sales of


                                       23
<PAGE>

$6,618 (1,855 mcf at an average price of $3.57).  During the period, we began to
accrue revenue for production from one well.

     Operating expenses for the three months ended May 31, 2009 were $3,702,886,
most of which was share based compensation  ($3,429,396).  Excluding share based
compensation,  operating  expenses  for the quarter  were  $273,490,  consisting
primarily  of  salaries  and  benefits,  amounts  paid under the  administrative
services  arrangement with PM, consulting and professional fees. These costs may
increase in future  periods as we  implement  our  business  plan and expand our
business activities.

     Operating expenses include  $3,429,396 of share based compensation  related
to the issuance of stock  options.  When stock  options are issued,  we estimate
their  fair  value  using the  Black-Scholes-Merton  option-pricing  model.  The
estimated  fair value is  recorded  as an  expense on a pro-rata  basis over the
vesting  period.  In  connection  with the  merger,  we agreed to issue  options
covering  4,000,000  shares to replace  similar options that had previously been
issued. We estimate that the fair value of the replacement  options exceeded the
fair value of the surrendered  options by $10,185,345  and the relevant  vesting
period is nine months. The pro-rata expense amount allocated to this quarter was
$3,395,115  and there is no remaining  amount to  recognize  in future  periods.
Other options have been issued which  increased total expense for the quarter to
$3,429,396.

Nine Months Ended May 31, 2009

     For the  nine  months  ended  May  31,  2009,  we  recorded  a net  loss of
$(11,105,098), or $(1.05) per share.

     Revenues for the nine months ended May 31, 2009 were $28,832,  representing
oil sales of $22,214  (619 bbls at an average  price of $35.89) and gas sales of
$6,618 (1,855 mcf at an average price of $3.57).  During the period, we began to
accrue revenue for production from one well.

     Operating expenses for the nine months ended May 31, 2009 were $11,147,496,
most of which was share based compensation ($10,282,000).  Excluding share based
compensation,  operating expenses for the nine months were $865,496,  consisting
primarily  of  salaries  and  benefits,  amounts  paid under the  administrative
services  arrangement with PM, consulting and professional fees. These costs may
increase in future  periods as we  implement  our  business  plan and expand our
business activities.

     Operating expenses include $10,282,000 of share based compensation  related
to the issuance of stock  options.  When stock  options are issued,  we estimate
their  fair  value  using the  Black-Scholes-Merton  option-pricing  model.  The
estimated  fair value is  recorded  as an  expense on a pro-rata  basis over the
vesting  period.  In  connection  with the  merger,  we agreed to issue  options
covering  4,000,000  shares to replace  similar options that had previously been
issued. We estimate that the fair value of the replacement  options exceeded the
fair value of the surrendered  options by $10,185,345  and the relevant  vesting


                                       24
<PAGE>

period is nine months.  The pro-rata expense amount allocated to this nine month
period was the entire amount of $10,185,345 and there is no remaining  amount to
recognized in future  periods.  Other  options have been issued which  increased
total expense for the quarter to $10,282,000.

Outlook

     The factors that will most  significantly  affect our results of operations
will be (i) the sale  prices of crude oil and  natural  gas,  (ii) the amount of
production  from oil or gas  wells in which we have an  interest,  and (iii) and
lease operating  expenses.  Our revenues will also be significantly  impacted by
our ability to maintain or increase oil or gas  production  through  exploration
and development activities.

     Other than the foregoing, management does not know of any trends, events or
uncertainties  that will have had or are reasonably  expected to have a material
impact on sales, revenues or expenses.

Forward-Looking Statements

     This Form 10-Q  contains  or  incorporates  by  reference  "forward-looking
statements,"  as that  term  is  used in  federal  securities  laws,  about  our
financial  condition,  results of  operations  and  business.  These  statements
include, among others:

      -  statements concerning the benefits that we expect will result from our
         business activities and results of exploration that we contemplate or
         have completed, such as increased revenues; and

      -  statements of our expectations, beliefs, future plans and strategies,
         anticipated developments and other matters that are not historical
         facts.

     These  statements  may  be  made  expressly  in  this  document  or  may be
incorporated by reference to other documents that we will file with the SEC. You
can find many of these  statements  by  looking  for words  such as  "believes,"
"expects," "anticipates," "estimates" or similar expressions used in this report
or incorporated by reference in this report.

     These forward-looking statements are subject to numerous assumptions, risks
and uncertainties  that may cause our actual results to be materially  different
from any future results  expressed or implied in those  statements.  Because the
statements  are subject to risks and  uncertainties,  actual  results may differ
materially  from those  expressed  or  implied.  We caution you not to put undue
reliance on these  statements,  which speak only as of the date of this  report.
Further,  the information  contained in this document or incorporated  herein by
reference is a statement of our present  intention and is based on present facts
and assumptions, and may change at any time and without notice, based on changes
in such facts or assumptions.



                                       25
<PAGE>


Risk Factors Impacting Forward-Looking Statements

     The important factors that could prevent us from achieving our stated goals
and objectives include, but are not limited to, those set forth in our Form 10-K
filed with the SEC and the following:

     o    The worldwide economic situation;

     o    Volatility in the price of oil and gas;

     o    Any change in interest rates or inflation;

     o    The   willingness   and  ability  of  third  parties  to  honor  their
          contractual commitments;

     o    Our  ability to raise  additional  capital,  as it may be  affected by
          current  conditions in the stock market and competition in the oil and
          gas industry for risk capital;

     o    Our capital costs, as they may be affected by delays or cost overruns;

     o    Our costs of production;

     o    Environmental and other  regulations,  as the same presently exist and
          may hereafter be amended;

     o    Our ability to identify, finance and integrate other acquisitions; and

     o    Volatility of our stock price.


     We undertake no  responsibility  or  obligation  to update  publicly  these
forward-looking  statements,  but may do so in the  future  in  written  or oral
statements.  Investors  should take note of any future  statements made by or on
our behalf.

Item 4.  Controls and Procedures.

     (a) We maintain a system of controls and procedures designed to ensure that
information  required to be  disclosed  by us in reports  that we file or submit
under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded,
processed,  summarized and reported,  within time periods specified in the SEC's
rules and forms and to ensure that information required to be disclosed by us in
the  reports  that we file or  submit  under the 1934 Act,  is  accumulated  and
communicated to our management,  including our Principal  Executive  Officer and
Principal  Financial Officer, as appropriate to allow timely decisions regarding
required  disclosure.  As of May 31, 2009,  under the  supervision  and with the
participation  of  our  Principal  Executive  Officer  and  Principal  Financial
Officer,  management has evaluated the effectiveness of the design and operation
of our  disclosure  controls  and  procedures.  Based  on that  evaluation,  the
Principal  Executive Officer and Principal  Financial Officer concluded that our
disclosure controls and procedures were effective.

     (b)  Changes  in  Internal  Controls.  There were  changes in our  internal
control  over  financial  reporting  during the quarter  ended May 31, 2009 that
materially  affected or are reasonably likely to materially affect, our internal
control over  financial  reporting.  Specifically,  those  changes  included the
implementation  of  controls  over the revenue  recognition  cycle and review of

                                       26
<PAGE>

joint interest  billings from third party operators.  Our evaluation of internal
controls discussed in the preceding  paragraph was conducted after those changes
were implemented.





                                       27
<PAGE>

                                     PART II

Item 1.  Legal Proceedings.

            None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

     During the three months  ended May 31, 2009,  we sold 61,000 units at $3.00
per unit for gross cash proceeds of $183,000. Subsequent to May 31, 2009 we sold
698,333 additional units.

     The units consist of two shares of our common  stock,  one Series A Warrant
and one Series B Warrant.

     Each  Series A Warrant  entitles  the holder to  purchase  one share of the
Company's  common  stock at a price of $6.00 per  share.  The  Series A Warrants
expire on the earlier of December  31,  2012 or twenty  days  following  written
notification  from the Company  that its common stock had a closing bid price at
or above $7.00 for any ten of twenty consecutive trading days.

     Each  Series B Warrant  entitles  the holder to  purchase  one share of the
Company's  common  stock at a price of $10.00 per  share.  The Series B Warrants
expire on the earlier of December  31,  2012 or twenty  days  following  written
notification  from the Company  that its common stock had a closing bid price at
or above $12.00 for any ten of twenty consecutive trading days.

     Neither the shares nor the warrants were  registered  under the  Securities
Act of 1933,  as  amended  (which we refer to as the "Act") and we relied on the
exemption  from  registration   provided  by  Section  4(2)  of  the  Act.  Each
certificate representing the shares issued in the transaction was stamped with a
legend indicating that the shares  represented by the certificate are restricted
securities,  as that term is defined in Rule 144 of the  Securities and Exchange
Commission.

Item 3.  Default Upon Senior Securities.

            None.

Item 4.  Submission of Matters to a Vote of Securities Holders.

            None.

Item 5.  Other Information.

            None.



                                       28
<PAGE>


Item 6.  Exhibits

a.  Exhibits

      31.1    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
              2002 for Edward Holloway.

      31.2    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
              2002 for Frank L. Jennings.

      32      Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
              2002 for Edward Holloway and Frank L. Jennings.





                                       29
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                    SYNERGY RESOURCES CORPORATION

Date:  July 8, 2009
                                    By:  /s/ Edward Holloway
                                        ------------------------------------
                                        Edward Holloway, President and Principal
                                        Executive Officer



Date:  July 8, 2009
                                    By:  /s/ Frank L. Jennings
                                        -----------------------------------
                                        Frank L. Jennings, Principal Financial
                                        and Accounting Officer