Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today announced that it has entered amendments extending the terms of the existing forbearance agreements with (i) all of the holders of notes (the “First Lien Notes”) in the amount of $54.6 million issued under that certain Indenture dated as of November 22, 2013 (the “First Lien Indenture”), by and among the Company and its subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee (the “First Lien Trustee”); and (ii) 75% or more of the holders of notes (the “Second Lien Notes”) in the amount of $125.2 million issued under that certain Indenture dated as of July 12, 2011, as supplemented or amended (the “Second Lien Indenture”), by and among the Company and its subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Second Lien Trustee”).
Pursuant to the terms of the amended forbearance agreements, the forbearance period under the existing Forbearance Agreements has been extended until April 30, 2015.
The Company also announced that it has engaged Conway MacKenzie Management Services, LLC (“CMS”) to act as its financial advisor in connection with its ongoing efforts to restructure its Senior Debt. Pursuant to that engagement, the Company has appointed Jeff N. Huddleston, of CMS, as Interim Chief Financial Officer, and John T. Young, Jr., also of CMS, as Strategic Alternatives Officer. Messrs. Huddleston, Young and CMS will work closely with management, the independent directors and the board with a view to maximizing value and achieving a satisfactory restructuring or repayment of the Senior Debt.
Andy Clifford, President of Saratoga, stated: “We are continuing to work with our lenders in order to achieve a mutually satisfactory restructuring and to allow the Company to operate in the current low commodity price environment. Over the last quarter, we have worked tirelessly to bring down our lease operating expenses and G&A. Estimated lifting costs for January 2015 are down to less than $18 per BOE, including LOE of less than $14 per BOE, with a gross operating margin of $21 per BOE. Combined savings expected from cuts in LOE and G&A to date are expected to amount to more than $15 million annually. We look forward to adding the capabilities of CMS and their seasoned team to assist the Company in developing and implementing our plan to restructure or repay our existing debt.”
About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover approximately 52,000 gross/net acres, mostly held by production, located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana and in the shallow Gulf of Mexico Shelf. Most of the company’s large drilling inventory has multiple pay objectives that range from as shallow as 1,000 feet to the ultra-deep prospects below 20,000 feet in water depths ranging from less than 10 feet to a maximum of approximately 80 feet. For more information, go to Saratoga’s website at www.saratogaresources.comand sign up for regular updates by clicking on the Updates button.
About Conway MacKenzie
Conway MacKenzie (CMS) is a national consulting firm that specializes in corporate restructurings, operations improvement, litigation analytics, valuations and bankruptcy case management services. CMS’s Houston office is located at 1301 McKinney Street, Suite 2025, Houston, Texas, 77010. CMS has extensive experience working with and for distressed companies in complex financial and operational restructurings, both out-of-court and in chapter 11 proceedings throughout the United States. CMS professionals have advised debtors, creditors and equity constituents in numerous reorganizations, which advisory services have included financial analysis and budgeting, forecasting, cash management, operational assessments and improvements, and the provision of interim management. CMS is a national leader in performing restructuring services to the energy sector.