SARA

[dan_s]

Saratoga Resources (SARA) looks very good to me. If you live in the Dallas area you should attend our luncheon at the Dallas Petroleum Club on May 10. It is FREE to anyone that registers on our website. Just click on the Calendar Tab.

Saratoga is currently producting over 4,200 boepd (60% oil). Their official guidance is to exit 2012 at over 5,000 boepd.
> All of their oil & gas sells in the Gulf Coast market at premium prices.
> Proven Reserves as of 12-31-2011 are worth over $12/share (net of debt)
> Stock is trading at less than 3X CFPS today.

I will be sending a company profile and a forecast model to all EPG members by May 9.

[dan_s]

Watch List: Our initial company profile & our Net Income and Cash Flow Forecast for Saratoga Resources (SARA) is now availble under the Watch List Tab.

[dan_s]

Saratoga Resources provided a lot more info at our luncheon in Dallas on May 10. Their presentation can be found on the home page. Just click on "Dallas Presentation".

Q1 production will be around 3,500 boepd (60% oil) then it is going to ramp up sharply. They said current production is 4,250 boepd (still 60% oil) and it will ramp up to over 5,000 boepd by year-end.

[setliff]

Saratoga Resources, Inc. Reports First Quarter 2012 Financial Results

Press Release: Saratoga Resources, Inc. – 26 minutes ago

HOUSTON--(BUSINESS WIRE)--

Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today announced financial and operating results for the quarter ended March 31, 2012.

Key Financial Results

•Oil and gas revenues of $19.3 million for the first quarter 2012 compared to $15.8 million for the first quarter 2011;
•Net loss of $(1.2) million, or $(0.04) per fully diluted share, for first quarter 2012 compared to net income of $358,000, or $0.02 per fully diluted share, for the first quarter 2011;
•Discretionary cash flow of $5.8 million, or $0.21 per fully diluted share, for the first quarter 2012 compared to discretionary cash flow of $5.4 million, or $0.26 per fully diluted share, for the first quarter 2011;
•EBITDAX of $10.0 million for the first quarter 2012 compared to $9.3 million for the first quarter 2011; and
•Reserve replacement ratio of 151%.
Discretionary cash flow and EBITDAX are non-GAAP financial measures and are defined and reconciled to the most directly comparable GAAP measure under “Non-GAAP Financial Measures” below.

complete report here---

http://finance.yahoo.com/news/saratoga-resources-inc-reports-first-132000664.html

[setliff]

dissappointed by this give away of stock 10% below mkt----
also, earnings report said all caapex would be funded by cash flow?????


Saratoga Resources, Inc. Announces $18.6 Million Private Placement of Common Stock


HOUSTON--(BUSINESS WIRE)--

Saratoga Resources, Inc. (NYSE MKT: SARA) (the “Company”) today announced that it has entered into definitive agreements to sell 2.9 million shares of its common stock at $6.25 per share in a private placement to a select group of institutional and accredited investors for total gross proceeds of $18.6 million before the deduction of placement agent commissions and offering expenses.

The Company expects to use the proceeds from this financing to fund acceleration of its drilling and development program on its existing assets. The transaction is expected to close on or about May 17, 2012, subject to the satisfaction of certain customary closing conditions.

[setliff]

i stand corrected--here is statement re funding capex.

"•2012 CAPEX budget fully funded by cash on hand and projected operating cash flow."

cash on hand includes the sale of stock for 6.25, i guess.

[danross70]

Setlif, I think management's ownership of 32% of the SARA stock pretty much assures us that they work for the best financing possible. They may have had to give up the $6.25 price to get the money they needed to expand production. They may have been wrong, but I doubt that they were thoughtless.

[dan_s]

Successful Efforts method of accounting makes it difficult for these small-caps to report earnings in their early stages. I was a bit disappointed with results but the outlook on this one is strong.

Focus must be on CFPS for these small-caps in the early going, especially when they have a significant capex program underway.

I have a couple meetings today but I promise to have an updated forecast model under the Watch List Tab late today or early tomorrow.

[setliff]

oh, i don't think for a moment that they were thoughtless.

[dan_s]

An updated forecast model has been posted under the Watch List Tab.

It is very important to remember that Successful Efforts is not "friendly" to a small-cap in their early stages. Lots of stuff that would be capitalized under the Full Cost method must be expensed under SE.

Focus on CFPS. If SARA hits their production targets the company will be fine but investors may see a couple more quarters of losses before they report positive earnings.