Vermilion 16 Field

The Vermilion 16 Field is located in the transitional coastline in a protected in-bay environment on state leases offshore Vermilion Parish, approximately 40 miles south of Lafayette, Louisiana. It is situated in approximately 12 feet of water, 0.5 miles offshore in theGulf of Mexico. We are the operator with a 100% working interest and a net revenue interest ranging from 75% to 83%. The seven existing state leases cover an estimated 4,095 gross/net acres, of which 3,573 net acres are HBP. Facilities include a central platform and the five wellbores associated with the field.

The field is a four-way rollover anticline on the downthrown side of a down-to-the-south fault. There are multiple stacked reservoirs within the field which has historical production from 30 stacked sands between 10,500′ and 17,000′ in depth. Pulsed neutron logging has been performed in order to identify unswept hydrocarbons within existing wellbores. There are five wellbores associated with this field and eight proved undeveloped drilling locations within the field. NuTech Energy Alliance completed a full field study of the Vermilion 16 Field in early 2010. We licensed 25 square miles of 3D seismic data in 2008, which we expect to use to better locate proposed development wells.

Saratoga is drilling the Mesa Verde SL 3763 #14 development well during the second quarter of 2012. This well is targeting up to seven Lower Miocene Marg A sands with 60 BCFE of 3P reserves. The target reservoirs are located in the footwall of the main trapping fault to Vermilion 16 Field.

During the fourth quarter of 2011, we entered into joint venture discussions with McMoRan Exploration Company to target exploration of ultra-deep prospects (below approximately 20,000 feet) in Vermilion 16, beginning with our Long John Silver prospect. Joint venture discussions with McMoRan were continuing as of late-March 2012.