Operational highlights for first quarter 2012 included:
- 6 recompletions and 3 SWD workovers completed;
- $1.3 million invested in continuing infrastructure upgrade program to de-bottleneck and support increased production;
- 107 gross (104 net) wells in production at March 31, 2012; and,
- 32,185 gross (32,185 net) acres in 12 fields under lease at March 31, 2012.
During the first quarter of 2012, Saratoga undertook six recompletions and three workovers related to conversion to, or maintenance of, salt-water disposal wells. Saratoga also continued to invest in infrastructure upgrades and additions to support existing production and anticipated increases in production, investing $1.3 million in infrastructure projects during the quarter. In the final weeks of the quarter, following extended delays arising from fabricator delivery times, Saratoga substantially completed its de-bottlenecking projects. As a result, Saratoga believes that infrastructure related curtailment of production has been substantially resolved.
- Oil and gas production of 150.7 thousand barrels of oil (“MBO”) and 620.7 million cubic feet of gas (“MMCFG”), or 254.2 thousand barrels of oil equivalent (“MBOE”) (59% oil) for the first quarter 2012, up 24% from 205.5 MBOE for the first quarter 2011; and
- Production rates grew during the quarter as infrastructure de-bottlenecking projects were completed late in the quarter and with continued progress in recompletion and workover programs.
Production rates were curtailed early in the quarter due to ongoing delays in completion of infrastructure de-bottlenecking projects, with delays arising from longer than expected lead times in fabrication of critical components. Those delays, together with selective curtailment of gas production due to pricing, resulted in lower than expected production during the first quarter. With the completion of the principal de-bottlenecking projects during March, the completion of a four well recompletion program and other investments in Saratoga’s development program, production levels moved up substantially over the final days of the quarter. The impact of completing the de-bottlenecking program, together with investments in Saratoga’s development program are reflected in monthly production volumes growing as shown in the accompanying "Monthly Net Production Volumes" graphic.