Saratoga Resources, Inc. Establishes New Production Benchmark and Provides Operations Update
November 01 2011 - 7:00AM
Business Wire
Saratoga Resources, Inc. (NYSE Amex: SARA) (the “Company”) today
provided an update with respect to its development and related
activities and production during the 2011 third quarter and
announced that it has established a new daily production benchmark
with net production of 4,167 barrels of oil equivalent per day
(BOEPD) (5,556 BOEPD gross) on October 24, 2011, an 81% increase in
daily net production from the 2010 exit rate of approximately 2,300
BOEPD.
Development Drilling
During the quarter, the Company drilled two developmental wells,
the SL 20436 #1 “Catina” well, and the MP 47 SL 195 QQ #24 “Roux”
well.
The Catina well began production on August 29, 2011, and, as of
October 31, 2011, was producing approximately 609 BOEPD gross (475
BOEPD net) on a 14/64” choke with flowing tubing pressure (FTP) of
2600 psi. The well was tied back to the Company’s Main Pass 46
facilities.
The Roux well was tested and completed in the 21 sand after the
quarter end. The well reached a total depth of 10,085’ MD (9,200’
TVD) and encountered 13 pay sands with over 100 net feet of pay.
Six of the pay sands were not previously booked as reserves and the
21 sand was previously booked as probable undeveloped reserves. The
well tested on October 16, 2011, with an initial production rate of
643 BOEPD gross (450 BOEPD net) on a 14/64” choke with FTP of 3000
psi. The Company expects that this well will convert from
predominantly gas production to oil since the oil cut has been
increasing since first production. The well has been tied back to
the Company’s Grand Bay facilities.
Recompletion and Workover Program
Highlighting the recompletions undertaken by the Company were
the SL 20034 #1 “Four Corners” and SL 335 LP #6 wells.
The Four Corners recompletion was in the 6,100’ sand uphole from
two previously produced sands. In addition, the 6,200' sand was set
up as a future plugback. Neither of these sands had booked reserves
in the Company's 1-1-2011 SEC reserve report. The Four Corners well
began production on August 16, 2011, and, as of October 31, 2011,
was producing approximately 271 BOEPD gross (204 BOEPD net) on a
14/64” choke with FTP of 2000 psi. The well was tied back to the
Company’s Main Pass 46 facilities.
The LP #6 recompletion was in the R sand, which had never
previously been produced at Grand Bay Field. There were no booked
reserves in the Company's 1-1-2011 SEC reserve report for this
sand. The well began production on June 14, 2011, and, as of
October 31, 2011, was producing approximately 163 BOEPD gross (128
BOEPD net) on a 9/64" choke with FTP of 1925 psi. The well was tied
back to the Company's Grand Bay facilities.
Infrastructure Program
Infrastructure upgrades and debottlenecking projects have
continued through September 30, 2011, and are ongoing. During the
course of 2011, the Company has added additional compression at
Breton Sound 32 and Main Pass 25 fields and re-enacted a 4-inch
8-mile pipeline to connect three wells to Breton Sound 32 Field.
The planned infrastructure improvements are approximately 80%
complete and have already resulted in production increases of at
least 800 BOEPD net to the Company. These projects are expected to
add capacity to open wells that are currently shut in or restricted
from optimal flow.
Management Comments
The Company’s President, Andy Clifford, said, “Our capital and
production efficiency year-to-date has been 101% and 112%,
respectively, and our finding and development cost in 2011 has been
excellent at $12.33/BOE. We are on track to meet our forecasted
2011 exit production rate of net 4,000 BOEPD. We are pleased with
the results of operations and will continue to develop our core
assets with additional drilling and continued low risk
recompletions. We have continued to have great support from the
state government with no delays in permitting from any of the
regulatory authorities. Furthermore, the Louisiana crude market
continues to be strong with Light Louisiana Sweet Crude (LLS) and
Heavy Louisiana Sweet Crude (HLS) each trading at a healthy premium
of approximately $20 per barrel to WTI.”
About Saratoga Resources
Saratoga is an independent exploration and production company
with offices in Houston, Texas, and Covington, Louisiana. Principal
holdings cover 33,869 gross (31,125 net) acres, mostly
held-by-production, located in the transitional coastline and
protected in-bay environment on parish and state leases of south
Louisiana.
For more information, go to our 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, as amended, including statements
with respect to expected stabilized production rates from wells,
oil and gas production mix, ultimate production volumes, the rate,
ability to finance and the ultimate success of development
drilling, commodity prices and other statements of expectation.
Words such as “anticipates,” “assumes,” “believes,” “estimates,”
“expects,” “intends,” “plans,” “seeks,” “should,” "substantial",
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.