There's one thing I believe is just as important across industries: "Cash-flow is King!". The company's balance sheet gives me a good sign because cash and cash equivalents have been increasing since inception and in the last year it doubled compared to 2011. Of course, cash can come from different sources so it is crucial to understand its origin.
The good news is operating cash-flow is increasing very fast (almost tripled in 2012) and cash-outflows from investing activities more than doubled. In this industry we've seen that the most important thing to do is replace the asset base at a faster rate than it depletes, so investing should be a good decision. Going a little deeper we see this investment is mainly (2/3) producing and non-producing evaluated costs (remember this was not included in income statements because SYRG follows full cost method of accounting) and 1/3 of this investment is in lease acquisitions and wells in progress. Net cash provided by financing activities also more than doubled this last year mostly due to a capital increase of 14,6 million shares at $2,75 (around $40 million). A company so young and with such growth prospects obviously needs to raise capital so this makes sense.
Also SYRG discolsed a 2013 CAPEX Budget of $82 million most of which is to drill almost 30 new wells as operator and to acquire Orr Energy (already happened this month for a total consideration of $42 million, comprised of $30 million in cash and $12 million in common stock (approximately 3.1 million shares)).
Now about Operating Cash-flow there's a lot of things to see. 2012 is the first profitable year for SYRG and that is the reason why operating cash-flow was negative in 2009 and 2010.
DDA is a cost to which there isn't a cash-outflow so it has a positive impact on cash-flow computation. As a result of the company's investment policy, 2012 included $6 million of cash from DDA andit is likely to increase fast in following years.
Changes in Working Capital are mainly due to changes in accounts receivables as expected and accrued expenses which increased about $6 million from revenues payable (revenues from wells SYRG operates but share ownership interests with other companies).
To conclude, I believe that more important than the growth in cash Y-o-Y is the source of that cash. The company is performing well, it shows no signs of struggle to raise cash, but better than that it is starting to generate money from operational activities, especially from net income.