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Saratoga Resources, Inc. Announces Pricing Of $25.0 Million Of 12½% Senior Secured Notes

Stocks in this article: SARA

Saratoga Resources, Inc. (NYSE MKT: SARA, “Saratoga” or the “Company”) announced today the pricing of a private placement of $25.0 million of 12½% Senior Secured Notes due 2016. The offering was sold at 98.58% of par plus accrued interest from July 1, 2012. The offering, which is subject to customary closing conditions, is expected to settle on December 4, 2012. Net proceeds from the offering will be used for general corporate purposes, including working capital and capital expenditures.

The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The notes may be resold by the initial purchaser pursuant to Rule 144A and Regulation S under the Securities Act.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities. This notice is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

Thomas F. Cooke, Saratoga’s Chairman and Chief Executive Officer, said, “We are pleased at the prospect of adding liquidity and establishing a substantial cash reserve as we close out 2012 and enter 2013. Following the deferral of upwards of $7+ million in revenues in the wake of Hurricane Isaac and the resulting deferral of multiple projects, as we are rebuilding our cash position, this added liquidity is expected to provide operating flexibility and the ability to move up the time frame of several projects originally targeted for completion before year-end 2012, including our planned QQ-209 development well and two major rig recompletions in Grand Bay field. These projects, based on our internal estimates, are expected to add 500 or more barrels of net production per day with over 80% of this projected production increase expected to be oil. We are presently engaged in efforts to secure rigs to begin work on those projects as soon as possible. With our production and cash flow returning to normal levels post-Hurricane Isaac and the prospect of adding production from bringing our development plan back on schedule, and in order to lock-in the favorable oil pricing we continue to enjoy, we recently added new hedges covering 1,000 barrels of oil per day for the first quarter of 2013 at an average price of $107.50 per barrel for our Light Louisiana Sweet crude production.”

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