Saratoga Resources Announces Extension of Forbearance Agreements with Senior Lenders; Engagement of Conway MacKenzie
March 19 2015 - 07:10PM
Business Wire
Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or
“Saratoga”) today announced that it has entered amendments
extending the terms of the existing forbearance agreements with (i)
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) 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 amended forbearance agreements, the
forbearance period under the existing Forbearance Agreements has
been extended until April 30, 2015.
The Company also announced that it has engaged Conway MacKenzie
Management Services, LLC (“CMS”) to act as its financial advisor in
connection with its ongoing efforts to restructure its Senior Debt.
Pursuant to that engagement, the Company has appointed Jeff N.
Huddleston, of CMS, as Interim Chief Financial Officer, and John T.
Young, Jr., also of CMS, as Strategic Alternatives Officer. Messrs.
Huddleston, Young and CMS will work closely with management, the
independent directors and the board with a view to maximizing value
and achieving a satisfactory restructuring or repayment of the
Senior Debt.
Management Comments
Andy Clifford, President of Saratoga, stated: “We are continuing
to work with our lenders in order to achieve a mutually
satisfactory restructuring and to allow the Company to operate in
the current low commodity price environment. Over the last quarter,
we have worked tirelessly to bring down our lease operating
expenses and G&A. Estimated lifting costs for January 2015 are
down to less than $18 per BOE, including LOE of less than $14 per
BOE, with a gross operating margin of $21 per BOE. Combined savings
expected from cuts in LOE and G&A to date are expected to
amount to more than $15 million annually. We look forward to adding
the capabilities of CMS and their seasoned team to assist the
Company in developing and implementing our plan to restructure or
repay our existing debt.”
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.
About Conway MacKenzie
Conway MacKenzie (CMS) is a national consulting firm that
specializes in corporate restructurings, operations improvement,
litigation analytics, valuations and bankruptcy case management
services. CMS’s Houston office is located at 1301 McKinney Street,
Suite 2025, Houston, Texas, 77010. CMS has extensive experience
working with and for distressed companies in complex financial and
operational restructurings, both out-of-court and in chapter 11
proceedings throughout the United States. CMS professionals have
advised debtors, creditors and equity constituents in numerous
reorganizations, which advisory services have included financial
analysis and budgeting, forecasting, cash management, operational
assessments and improvements, and the provision of interim
management. CMS is a national leader in performing restructuring
services to the energy sector.
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 and
ability to successfully restructure or repay our debt. 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, 713-654-4009Investor
RelationsorAndrew Clifford,
713-458-1560Presidentwww.saratogaresources.com