Saratoga Resources Announces Forbearance Agreements with Senior Lenders
February 02 2015 - 4:01PM
Business Wire
Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or
“Saratoga”) today announced that it has entered into (i) a
forbearance agreement (the “First Lien Forbearance Agreement”) with
all of the holders of notes (the “First Lien Notes”) in the amount
of $54.6 million issued under that certain Indenture dated as of
November 22, 2013 (the “First Lien Indenture”), by and among the
Company and its subsidiaries and The Bank of New York Mellon Trust
Company, N.A., as trustee (the “First Lien Trustee”); and (ii) a
forbearance agreement (the “Second Lien Forbearance Agreement”)
with 75% or more of the holders of notes (the “Second Lien Notes”)
in the amount of $125.2 million issued under that certain Indenture
dated as of July 12, 2011, as supplemented or amended (the “Second
Lien Indenture”), by and among the Company and its subsidiaries and
The Bank of New York Mellon Trust Company, N.A., as trustee (the
“Second Lien Trustee”).
Pursuant to the terms of the First Lien Forbearance Agreement,
the holders of the First Lien Notes (the “First Lien Lenders”) will
forbear from exercising any rights or remedies that the First Lien
Lenders or the First Lien Trustee may have against the Company
under the First Lien Indenture until the earlier of March 16, 2015
or the occurrence of an event of default within the meaning of the
First Lien Forbearance Agreement (the “Forbearance Period”).
Under the terms of the First Lien Forbearance Agreement,
Saratoga will pay, by February 2, 2015, the accrued and unpaid
interest, with interest at the default rate, originally scheduled
to be paid on December 31, 2014.
The Second Lien Forbearance Agreement is substantially identical
to the First Lien Forbearance Agreement except that Saratoga is not
required under the Second Lien Forbearance Agreement to pay, during
the Forbearance Period, the scheduled January 1, 2015 interest
payment.
Under the Second Lien Indenture, action by holders of at least
25% in aggregate principal amount of the Second Lien Notes is
required to declare the notes due and payable under the Second Lien
Indenture. The Second Lien Forbearance Agreement has been executed
by holders of more than 75% in principal amount of the Second Lien
Notes. Those holders have agreed that they will not take any steps
to enforce any rights of the Second Lien Trustee or the Second Lien
Lenders during the Forbearance Period.
As previously disclosed, the interest payments scheduled to be
made on December 31, 2014, with respect to the First Lien Notes,
and January 1, 2015, with respect to the Second Lien Notes, were
not made on those dates. However, the interest payments are not in
default under the applicable indentures until 30 days after the
scheduled payment dates.
With the steep drop in oil prices over recent months, Saratoga
is focused on implementing substantial cost reductions to support
operations pending a rebound in prices. Significant cost savings
have already been realized through such efforts with further cuts
targeted. The Company is focused on working with its lenders to
address operational and liquidity concerns with a view to improving
profitability and ultimately repaying its outstanding notes.
About Saratoga Resources
Saratoga Resources is an independent exploration and production
company with offices in Houston, Texas and Covington, Louisiana.
Principal holdings cover approximately 52,000 gross/net acres,
mostly held by production, located in the transitional coastline
and protected in-bay environment on parish and state leases of
south Louisiana and in the shallow Gulf of Mexico Shelf. 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 ranging from less than
10 feet to a maximum of approximately 80 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, including, but not limited to,
statements regarding potential cost savings, results of specific
operations and future ability to achieve profitability under
existing market conditions, ability to meet future interest payment
obligations, ability to satisfy the terms of the forbearance
agreements and/or secure extensions of the same or otherwise assure
ongoing compliance with various debt obligations, among others.
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.
Saratoga Resources, Inc.Brad Holmes, Investor Relations, (713)
654-4009orAndrew Clifford, President, (713)
458-1560www.saratogaresources.com