HedgingThe Company also provided an update of its current hedging position as follows:
|1Q13||Oil||1,500 BOPD||$107.83||LLS & Brent|
Management CommentsMr. Thomas Cooke, Chairman and CEO of Saratoga Resources, said “We are pleased with the results of the QQ-25 well. The production tests were better than anticipated and the well came in under budgeted AFE costs. Continued results like this well should set the company up in 2013 to exceed its 2012 production growth rate of 18%. While it is always nice to announce a significant increase in annual production, that is particularly true this year when we had 100% of our production shut-in for approximately 17 days due to Hurricane Isaac and it was well into the 4 th quarter of the year before we were able to get all of our wells back on line. We estimate that these shut-ins resulted in deferred revenue in 2012 of between $7 and $8 million dollars. In spite of those interruptions, we anticipate reporting year-end discretionary cash flow of approximately $0.97 - $1.00 per share and we think these are very strong results.” Mr. Cooke added “As a result of weakness in natural gas prices during 2012, we anticipate that Saratoga, like many other operators, will be reporting some write-downs in year-end reserves driven by negative gas pricing revisions based on required SEC pricing models. We have recently reprocessed our proprietary Grand Bay 3-D seismic data and have re-launched detailed field studies and expect some exciting new opportunities to arise out of that effort. Back in 2008-2009, during the first phase of our field study, we increased reserves by over 40%. While we do not expect such a big increase this time around, the integration of the newly-reprocessed 3-D should yield some good results with high-grading of development drilling opportunities with a higher liquid component.” Non-GAAP Financial Measures Discretionary cash flow and discretionary cash flow per share are non-GAAP financial measures and supplemental financial measures used by the company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the company’s ability to internally fund exploration and development activities. Discretionary cash flow should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (“GAAP”). Discretionary cash flow excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the company’s Discretionary Cash Flow or its Discretionary Cash Flow Per Share may not be comparable to similarly titled measures used by other companies.
About Saratoga ResourcesSaratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,119 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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. Forward-Looking Statements This press release includes certain estimates and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. 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 otherwise.