Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today provided an update on the status of previously announced operations for the remainder of 2012 as well as guidance with respect to certain anticipated year-end financial metrics.
With respect to the previously announced QQ-209 “Buddy” development well, Saratoga has contracted the Parker 50-B drilling rig, which is currently being mobilized to location, and plans to spud the well this Sunday, December 23. Drilling operations on the Buddy well are expected to be completed by year end.
With respect to the previously announced recompletion operations in Grand Bay Field, operations have been completed and the Company has released the Moncla 118 workover rig. Operations on the MP-47 SL 195 QQ-24 well in Grand Bay Field consisted of a gravel-pack completion of the 29M sand while setting up the 20 sand as a future non gravel-pack completion. The well is expected to be brought on production in the next week. On the GPLD A-191 well in Grand Bay Field, the Company performed diagnostic work and has set a retrievable plug to accommodate future operations pending evaluation of its alternatives to access the associated reserves.
The Company also announced that its projected full year 2012 Discretionary Cash Flow is estimated at $30 million, or approximately $1.00 per share, and that its projected year end cash balance is estimated to be in excess of $32 million.
Mr. Thomas F. Cooke, Chairman and Chief Executive Officer of Saratoga Resources, said, “We are pleased to announce that we have returned to executing our development plan with the recompletion of our MP-47 SL 195 QQ-24 well, which came in under budget and ahead of schedule, and the imminent spud of our QQ-209 “Buddy” development well. In addition, the diagnostics performed on our GPLD A-191 are expected to allow us to develop an appropriate plan to maximize production from the well. As we bring the year to a close, we have returned production to normal operating levels after the shut-ins caused by Hurricane Isaac and once more building cash flow and our cash position. While financial performance for the year and our financial position have been impacted by the effects of Hurricane Isaac, including deferral of production and associated revenues estimated to exceed $7 million and deferral of our development plan and associated production and revenues, we are pleased with these anticipated results, all of which indicate that we are generating positive cash flow from operations and are well positioned to effect our 2013 business plan.”