Saratoga Resources Announces Extension of Forbearance Agreements with Senior Lenders; Engagement of Conway MacKenzie
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.com
and 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.
This press release includes certain estimates and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, including, but not limited to, statements regarding
potential cost savings, results of specific operations and future
ability to achieve profitability under existing market conditions,
ability to meet future interest payment obligations, ability to satisfy
the terms of the forbearance agreements and/or secure extensions of the
same or otherwise assure ongoing compliance with various debt
obligations, among others and ability to successfully restructure or
repay our debt. Words such as "expects”, "anticipates", "intends",
"plans", "believes", "assumes", "seeks", "estimates", "should", and
variations of these words and similar expressions, are intended to
identify these forward-looking statements. While we believe these
statements are accurate, forward-looking statements are inherently
uncertain and we cannot assure you that these expectations will occur
and our actual results may be significantly different. These statements
by the Company and its management are based on estimates, projections,
beliefs and assumptions of management and are not guarantees of future
performance. Important factors that could cause actual results to differ
from those in the forward-looking statements include the factors
described in the "Risk Factors" section of the Company's filings with
the Securities and Exchange Commission. The Company disclaims any
obligation to update or revise any forward-looking statement based on
the occurrence of future events, the receipt of new information, or
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