SARATOGA RESOURCES, INC. REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS

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Houston, TX – May 13, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today announced financial and operating results for the quarter ended March 31, 2013.

Key Financial Results
• Oil and gas revenues of $19.26 million for Q1 2013 compared to $19.34 million for Q1 2012;
• Discretionary cash flow of $5.1 million, or $0.16 per fully diluted share, for Q1 2013 compared to discretionary cash flow of $5.8 million, or $0.21 per fully diluted share, for Q1 2012;
• EBITDAX of $9.9 million for Q1 2013 compared to $10.0 million for Q1 2012;
•Operating income of $3.7 million, or $0.12 per fully diluted share, for Q1 2013 compared to operating income of $2.5 million, or $0.09 per fully diluted share, for Q1 2012; and
•Net loss of $(1.1) million, or $(0.03) per fully diluted share, for Q1 2013 compared to net loss of ($1.2) million, or $(0.04) per fully diluted share, for Q1 2012.
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.

Production was down 9.3% from the first quarter of 2012 to the first quarter of 2013. This decrease was primarily attributable to curtailed production in the Main Pass 25 Field associated with issues on a neighboring third party operated platform to which we produce and a temporary lack of gas lift gas in the field. In addition, in the Grand Bay Field, the QQ24 well was shut-in for five weeks during the drilling of the QQ25 well and there were shut-ins associated with infrastructure improvements. To a lesser extent, production was also impacted by the lingering effects of Hurricane Isaac. These decreases were partially offset by production added from our development drilling program over the last three quarters of 2012.
Average realized prices per barrel of oil equivalent were $83.51, up 9.7% quarter over quarter, primarily attributable to an 18.2% increase in natural gas prices realized partially offset by a 2.4% decline in crude oil prices realized. While oil and gas revenues continued to benefit from premiums to WTI pricing attributable to LLS and HLS pricing for our oil production, prices realized reflected a general strengthening of natural gas prices and general moderation in oil prices during the quarter.

Total revenues declined 7.3% from the first quarter of 2012 to the first quarter of 2013. In addition to the nominal decline in oil and gas revenue, the decline in total revenue reflects hedging losses of $0.6 million, associated with the reinstitution of our hedging program beginning late in 2012, and a decline in other revenues of $0.8 million principally reflecting a one-time gain of $0.6 million on the settlement of lawsuits during the 2012 quarter.

The increase in operating income for the quarter reflects a 15.2% decline in operating expenses which was principally attributable to lower workover expense (down $1.2 million, or 82.2%) due to decreased workover activity, lower plugging and abandonment expenses (down $1.6 million, or 100%) due to one-time P&A projects undertaken in the 2012 quarter, and a decline in general and administrative expense (down $0.6 million, or 23.4%) due to lower headcount and lower stock-based compensation expense. Those decreases were partially offset by higher DD&A expense (up $0.3 million, or 5.5%) due to increased investments in our development program, and an increase in production and severance taxes (up $0.4 million, or 24.4%) as a result of a reduction in the number of wells qualifying for reduced severance taxes. The improvement in operating income was partially offset by higher interest cost (up $0.8 million), as a result of our add-on note offering closed in late 2012 and a reduced tax benefit (down $0.2 million).

Operational Highlights
Operational highlights for first quarter 2013 included:
• 2 development wells completed, including 1 well in progress at the close of 2012, 3 recompletions completed and 1 workover completed and 1 in progress;
• 105 gross (104 net) wells in production at March 31, 2013;
• Restoration of production from remaining wells shut-in due to Hurricane Isaac;
• 32,027 gross/net acres in 11 fields under lease at March 31, 2013; and
• Apparent high bids submitted on four lease blocks covering 19,814 acres in the shallow GOM water.

During Q1 2013, Saratoga completed 2 successful development wells, the Buddy well in Grand Bay Field, which was started in late 2012, and the Roux Toux well in Main Pass Block 47 Field, which was drilled and completed during the quarter.
Saratoga also undertook 3 recompletions and 2 workovers during the quarter. All the recompletions were successful and 1 of the workovers was in progress as of the end of the quarter.

Production Highlights
• Oil and gas production of 156.7 thousand barrels of oil (“MBO”) and 443.3 million cubic feet of gas (“MMCFG”), or 230.7 thousand barrels of oil equivalent (“MBOE”) (68% oil) in Q1 2013, down 9.3% from 254.2 MBOE (59% oil) in Q1 2012; and
• Curtailments of production during Q1 2013 associated with third party handling issues and temporary lack of gas lift gas in Main Pass 25 Field, shut-ins due to drilling operations and infrastructure projects primarily in Grand Bay field and residual effects of Hurricane Isaac resolved by quarter end.

The decrease in production reflects curtailment of production from the Main Pass 25 Field where third party handling issues and temporary lack of gas lift gas resulted in a 21.5 MBOE (85%) decline in production from the field from Q1 2012 levels and shut-in of the QQ24 well in Grand Bay Field for 5 weeks during the drilling of the Roux Toux well which resulted in a 4.5 MBOE decline in production from the QQ24 well from Q1 2012 levels. Additionally, residual effects of Hurricane Isaac marginally decreased production.

Partially offsetting the curtailment in production from the Main Pass 25 Field and Grand Bay Field were additions to production attributable to new wells added through our development drilling program since Q1 2012. By the end of Q1 2013, all curtailments attributable to third party handling and gas lift issues in Main Pass 25 Field and drilling of the Roux Toux well, as well as residual curtailments associated with Hurricane Isaac, had been resolved.

Reserve Highlights
In addition to reserves associated with existing holdings, during the Q1 2013, Saratoga was the apparent high bidder on four leases totaling 19,814 acres in the Central Gulf of Mexico. Preliminary unaudited reserve potential for those leases has been estimated internally at 51.2 gross MMBOE, of which 5.4 gross MMBOE are expected to subsequently be qualified as PUD reserves.

Development Plans
• Low risk recompletions, thru-tubing plugbacks and workovers from inventory of approximately 60 proved developed non-producing (“PDNP”) opportunities in 7 fields;
• Development of proved undeveloped (“PUD”) reserves from inventory of approximately 84 PUD opportunities in 26 wellbores in 4 fields;
• Rocky horizontal well with 750’ lateral in Breton Sound 32 field planned for late Q2;
• Tubing replacement program being implemented to restore curtailed and shut-in production from inventory of approximately 20 wells;
• Main Pass 25 facilities upgrade program; and
• Strategic partnerships and joint ventures for risk-sharing on exploratory drilling of deep and ultra-deep prospects at Grand Bay and Vermilion 16 and on new Central Gulf of Mexico leases.

Our near term development plans are focused on proved undeveloped opportunities and conversion of PDNP opportunities. Two PUD wells were completed during Q1 2013 with a target of drilling and completing four to six total PUD wells during 2013, and five to six development wells annually thereafter.
We are negotiating for a barge rig to drill our first horizontal well in Breton Sound 32 field, the SL 1227-25 “Rocky” well. Saratoga plans to drill an initial 70-degree directional pilot hole to the target 5800’ sand then to plug back and drill a horizontal leg with a 750’ lateral into the reservoir. The estimated completed well cost is less than $7 million. The current water level in that part of the Breton Sound 32 field has already been established by running a PNL log in the SL 1227-21 well, determining that the oil-water contact has only risen by 6 inches in over 20 years. This significantly reduces the risk for the proposed horizontal completion.

After Rocky, there are several other horizontal completion opportunities including Zeke and Charlie, both in the same Breton Sound 32 field, and other opportunities in Grand Bay field under evaluation.

At Grand Bay, approximately 20 shut-in wells have been identified that appear to be candidates for tubing replacement and resumption of production. These wells were each producing between 20-50 BOPD prior to being shut-in. The tubing replacement program involves mounting a pulling unit on a shallow water barge at an estimated cost of less than $200,000 per well. If successful, for an approximate cost of $4 million, up to 400 net BOPD might be added to production, representing a payout of less than 6 months. Evaluation of candidates for the tubing replacement program is ongoing and initial operations in that program are expected to commence in June 2013.

Saratoga continues to monitor ongoing exploratory drilling operations of ultra-deep prospects near our lease holdings and to conduct discussions with potential partners regarding the development of our ultra-deep prospects. The results of ongoing third party ultra-deep exploratory drilling are expected to drive the ultimate determination regarding potential development of Saratoga’s ultra-deep prospects.

Subject to final award of leases by the Bureau of Ocean Energy Management, Saratoga also intends to seek partners to drill, develop and operate its prospects in the Central Gulf of Mexico on which it was the apparent high bidder in the recent lease sale.

In Main Pass 25 Field, discussions with a third party operator regarding upgrades to our facilities are continuing. The objective of those discussions is to increase production, improve economics in that field and reduce dependency upon third party facilities operators which caused the shut-in of most of our production in that field during the first quarter of 2013 due to third party production issues on a neighboring platform to which we produce.

The initiatives include a recompletion of the 7900’ sand in the SL 16432 #2 well, which was successfully carried out during the quarter, and pursuit of an arrangement with another operator to increase handling capacity at our facilities in Main Pass 25. Recompletion of the 7900’ sand provided sufficient gas lift gas to unload oil wells in the field. The anticipated arrangement with the third party operator includes our handling of production from a new discovery in the field by the third party operator and the provision by that operator of certain equipment to upgrade the handling capacity of our Main Pass 25 facilities. If that arrangement is carried out, we would potentially add production handling capacity at our Main Pass 25 facilities which may allow us to generate production handling revenues from the other operator, bring our production from the field handled by a third party back to Main Pass 25 and reduce monthly operating costs in the field while lowering line pressures and potentially increasing production in that field by up to 400 gross barrels of oil per day while adding a potential source of additional gas lift gas.

Financial Position and CAPEX Highlights
• $ 22.0 million of cash on hand at March 31, 2013, down from $32.3 million at December 31, 2012;
• Cash balance had grown to $24.8 million by end of April 2013;
• $18.6 million of working capital at March 31, 2013, down from $21.2 million at December 31, 2012;
• $7.1 million of CAPEX for Q1 2013;
• $37.1 million CAPEX budgeted for balance of 2013;
•  2013 CAPEX budget fully funded by cash on hand and projected operating cash flow;
•  Working capital adjusted debt to trailing twelve month EBITDAX of 2.9 times; and
•  Net asset value per share of approximately $9.

Saratoga continued to fund its operations, including its development program, from cash on hand and operating cash flows. The 2013 CAPEX budget is expected to be fully funded from cash on hand and operating cash flow.

Management Comments
Thomas Cooke, Chairman and CEO, commented, “As noted in our year end 2012 earnings release, production levels during the first quarter of 2013 were down due to factors largely beyond our control, most notably, third party processing issues and lack of gas lift gas which effectively resulted in the shut-in of production in Main Pass 25 for the entire quarter causing our production in the field to decline 21.5 MBOE from 2012 levels. Adding to such drop in production was the shut-in of our QQ24 well in Grand Bay Field for five weeks while we drilled our Roux Toux well which accounted for a 4.5 MBOE decline in production for that well compared to the first quarter 2012.

Notwithstanding the decrease in production during the quarter, we are pleased with a number of key advances during the quarter and since quarter end, including progress made in returning production to a positive trajectory, reinstituting our field study program, initiation of our tubing replacement program, the addition of key employees and the exciting prospect of commencing drilling operations on our first horizontal well.

While the issues noted affecting production levels resulted in a decline in daily production levels to a disappointing 2,563 BOE per day during the quarter, the resolution of the issues in question have allowed us to bring our daily production levels back up to approximately 3,000 BOE currently. That rise in production does not reflect any of the contemplated additions to production that we expect to derive from our tubing replacement program, infrastructure upgrades in Main Pass 25 and other routine maintenance projects presently planned to restore declines in production from a handful of wells.

In our tubing replacement program, we have completed our evaluation of a substantial number of candidate wells and have identified 21 wells to this point that we believe are prime prospects for restoration of production in that program and believe that as many as 30 wells will ultimately be included in the program. We expect to begin seeing results in the form of production adds before the end of the second quarter and have targeted completion of the program by mid-third quarter.

In Main Pass 25, we have made progress and expect to finalize our arrangement with an operator and to upgrade production facilities to both handle processing of that operator’s production in the field and lower system pressure, facilitating an increase in our production in the field by the end of the second quarter.
Finally, and most importantly in our minds, our recently re-initiated field study program is making great progress and is yielding dividends in identifying more impactful drilling prospects. Highlighting those prospects is our planned Rocky well, our first horizontal well. Having closely examined the results attained in prior horizontal wells drilled in the area which, though limited in number, have typically been among the most productive wells drilled in and around our acreage. We believe Rocky holds similar potential and are presently targeting having that well drilled, completed and on production during the second quarter.

I would also note that we have made a number of key additions to our operating team since the end of the first quarter, including adding two seasoned reservoir engineers and a geophysicist who, together, are working with Andy Clifford to maximize the payback on our field study program. We have also added an experienced land manager to bring in-house our land management operations.
With our cash balance having grown to more than $24 million and increasing and our payables down substantially since quarter end, we are well positioned to execute on our projects. While we have much on our plate, we are pleased to have moved past the challenges that weighed on our production during the first quarter and are excited to see the fruits of multiple potentially high impact projects that offer the prospects of significant production adds over the second and third quarters and beyond.”

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,027 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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 future ability to fund the company’s development program and grow reserves, production, revenues and profitability, ability to reach and sustain target production levels, ability to secure commitments to participate in exploration of deep shelf prospects, ability to secure leases and the ultimate outcome of such efforts. 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.

Non-GAAP Financial Measures
Discretionary Cash Flow is a non-GAAP financial measure.
The company defines Discretionary Cash Flow as net income (loss) before income tax expense (benefit), interest expense and depreciation, depletion and amortization excluding interest income, realized gains on out-of-period derivative contract settlements, (gain) loss on the sale of assets, acquisition costs, settlements for prior claims, other various non-cash items (including asset impairments, income from equity investments, stock-based compensation, unrealized (gain) loss on derivative contracts and provision for doubtful accounts), exploration and dry hole costs and costs associated with the company’s bankruptcy.

Discretionary Cash Flow is a supplemental financial measure used by the company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the company’s ability to internally fund exploration and development activities. Discretionary cash flow should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (“GAAP”). Discretionary cash flow excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the company’s Discretionary Cash Flow may not be comparable to similarly titled measures used by other companies.
The table below reconciles the most directly comparable GAAP financial measure to Discretionary Cash Flow.

EBITDAX is a non-GAAP financial measure.
The company defines EBITDAX as net income (loss) before income tax expense (benefit), interest expense and depreciation, depletion and amortization excluding interest income, realized gains on out-of-period derivative contract settlements, (gain) loss on the sale of assets, acquisition costs, settlements for prior claims, other various non-cash items (including asset impairments, income from equity investments, noncontrolling interest, stock-based compensation, unrealized (gain) loss on derivative contracts and provision for doubtful accounts), exploration and dry hole costs and costs associated with the company’s bankruptcy.

EBITDAX is a supplemental financial measure used by the company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the company’s ability to internally fund exploration and development activities and to service or incur additional debt. The company also uses this measure because EBITDAX allows the company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. EBITDAX should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (“GAAP”). EBITDAX excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the company’s EBITDAX may not be comparable to similarly titled measures used by other companies.

The table below reconciles the most directly comparable GAAP financial measure to EBITDAX:

The call will be held on Monday, May 13, 2013 at 9:30 AM CDT (10:30 EDT, 7:30 PDT). The call in phone number for those wishing to participate is (866) 501-1535, conference ID #59413523. Those outside the United States who want to participate should call (216) 672-5582, same conference ID number.

The call will be webcast and archived. The webcast can be accessed on the Company’s website, www.saratogaresources.com. In addition the call will be transcribed and the complete transcription will be available on the Company’s website approximately 72 hours after the call.

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,027gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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.

Saratoga Resources, Inc. to Present at IPAA Oil & Gas Investment Symposium

Houston, TX – April 15, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) will present at the IPAA (Independent Petroleum Association of America) annual Oil & Gas Investment Symposium on Wednesday, April 17, 2013 at 2:00 PM EDT. The conference is being held at the Sheraton New York Hotel and Towers in New York City.

A live webcast of the presentation will be streamed on the Company’s website, www.saratogaresources.com, and a copy of the presentation will be posted on the website prior to the event.

The IPAA Oil & Gas Investment Symposium is the largest oil and gas specific investment conference held in North America. Attendees include fund managers, analysts and accredited investors who meet with company management teams to learn about investment opportunities.

In addition to presenting at the conference, Saratoga will meet with current and potential investors in one on one meetings and will meet with the sales forces of two major market makers.

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,027gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 feet.

Contacts: Brad Holmes, Investor Relations (713) 654-4009; or Andrew Clifford, President (713) 458-1560; or Michael Aldridge, CFO (713) 458-1560

Website: www.saratogaresources.com
(2012 Earnings) 3-27-2013 FINAL

Houston, TX – March 27, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today announced financial and operating results for the quarter and year-ended December 31, 2012.

Key Financial Results
Year-Ended 2012

*  Production of 1,116,300 barrels of oil equivalent, or 3,058 barrels of oil equivalent per day, for 2012, up 18% from 2011;
*  Oil and gas revenues of $82.5 million for 2012 compared to $76.2 million for 2011;
*  Discretionary cash flow of $29.3 million, or $1.00 per fully diluted share, for 2012 compared to discretionary cash flow of $30.5 million, or $1.37 per fully diluted share, for 2011;
* EBITDAX of $45.7 million for 2012 compared to $47.9 million for 2011;
*  Operating income of $12.3 million, or $0.42 per fully diluted share, for 2012 compared to operating income of $25.3 million, or $1.13 per fully diluted share, for 2011; and
*  Net loss of $(3.7) million, or $(0.13) per fully diluted share, for 2012 compared to net income of $20.8 million, or $0.93 per fully diluted share, for 2011.

Fourth Quarter
*  Oil and gas revenues of $22.9 million for fourth quarter 2012 compared to $22.7 million in the fourth quarter 2011;
* Discretionary cash flow of $9.7 million, or $0.31 per fully diluted share, for the fourth quarter of 2012 compared to discretionary cash flow of $7.5 million, or $0.28 per fully diluted share, in the fourth quarter of 2011;
* EBITDAX of $13.8 million for the fourth quarter of 2012 compared to $13.0 million in the fourth quarter of 2011; and
* Net loss of $(2.9) million, or $(0.09) per fully diluted share, for the fourth quarter of 2012 compared to net income of $10.7 million, or $0.40 per fully diluted share, in the fourth quarter of 2011.

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.

All key financial results for 2012 and the fourth quarter of 2012 reflect the effects of Hurricane Isaac which resulted in the 100% shut-in of production for 17 days late in the third quarter of 2012, curtailed production well into the fourth quarter as wells were being brought back onto production, and an estimated $2.24 million of damage to company assets, of which we expect insurance to cover approximately $1.84 million.

The change in revenues for the 2012 quarter and year reflects an increase in production volumes (up 18% year over year) partially offset by lower realized oil and natural gas prices. The increase in production reflects accelerated investment in our development and infrastructure program beginning in the second half of 2011 and continuing through 2012, partially offset by the shut-in of production resulting from Hurricane Isaac. While revenue continued to benefit from the realization of premiums to WTI pricing attributable to LLS and HLS pricing for our oil production, average realized prices were down 0.5% for oil, 29.7% for natural gas and 8.2% on a per barrel of oil equivalent (BOE) basis reflecting a general moderation in oil prices and narrowing premiums on our natural gas production.

The decline in operating income and profitability for the year and fourth quarter reflects a substantial decline in production volumes late in the third quarter and continuing into the fourth quarter as a result of Hurricane Isaac. For the full year, the decline in operating income and profitability also reflects, among other items, (i) increased DD&A expense (up $11.8 million, or 75.8%) as a result of our increased investments in our development program, higher production volumes and a reduction in reserves associated with certain predominately gas wells, (ii) a substantial increase in plugging and abandonment costs (up $2.1 million, or 527.3%) as a result of plugging of orphaned high pressure wells, (iii) increased lease operating expense (up $2.2 million, or 12.8%) as a result of increased production volumes and transportation and other expenses associated with restoring production following Hurricane Isaac, (iv) increased workover expense (up $1.2 million, or 43.6%) as a result of an increase in the number of workovers undertaken, and (v) increased severance taxes (up $1.7 million, or 27.5%) as a result of increased production and a reduction in the number of wells qualifying for reduced severance taxes; all partially offset by a decline in dry hole costs (down $3.8 million, or 97.6%) as a result of drilling one dry hole during 2011. Also contributing to the decline in profitability during 2012 versus 2011 was a decrease in income tax benefit (down $5.1 million, or 74.4%) as a result of recognition of deferred tax assets, and a one-time gain of $7.7 million realized during 2011 as a result of the early extinguishment of debt.

Operational Highlights
Operational highlights for 2012 included:

* 3 development wells, 12 recompletions and 16 workovers completed;
* 15 new pool discoveries;
* 87 gross (86 net) wells in production at December 31, 2012;
* Plugged and abandoned 5 orphaned legacy wells;
* The majority of wells shut-in due to Hurricane Isaac restored to production by year-end; and,
* 32,027 gross/net acres in 11 fields under lease at December 31, 2012.

During 2012, Saratoga drilled 3 successful development wells, the Jupiter well in Grand Bay Field, the North Tiger well in Breton Sound 18 Field and the Mesa Verde well in Vermilion 16 Field. The wells encountered multiple potentially productive intervals and included 15 new pool discoveries. A fourth development well, the Buddy well, had been drilled and tested at December 31, 2012 and was completed after year end.

Saratoga also undertook 12 recompletions and 16 workovers during the year. Eleven of the 12 recompletions were successful, with 1 recompletion not reaching its objectives due to mechanical issues, although the reserves will stay on the books and be accessed through future development drilling.

Plugging and abandonment operations were completed on 5 wells on expired leases on which Saratoga inherited P&A obligations from the previous owners. Saratoga had never produced 4 out of 5 of the wells in question and those wells included the four deepest and highest pressure wells in our P&A inventory.

Production Highlights

* Oil and gas production of 192.6 thousand barrels of oil (“MBO”) and 702.1 million cubic feet of gas (“MMCFG”), or 309.6 thousand barrels of oil equivalent (“MBOE”) (62% oil) in Q4 2012, and 676.4 MBO and 2,639.5 MMCFG, or 1,116.3 MBOE (61% oil) for 2012, up 18% from 945.6 MBOE in 2011.

The increase in production during 2012 reflects accelerated investment in our development and infrastructure upgrade program. The gains in production during 2012 were substantially curtailed by the effects of Hurricane Isaac. Production was 100% shut-in for 17 days and bottlenecks principally associated with third party operations continued to partially curtail production for much of the fourth quarter of 2012 and into 2013. By year-end, the majority of the wells had been brought back onto production following Hurricane Isaac and development operations had resumed.

Reserve Highlights

*  Year-end 2012 SEC proved reserves consisted of 8.407 million barrels of oil (“MMBO”) and 52.918 billion cubic feet of gas (“BCFG”), or 17.227 million barrels of oil equivalent (“MMBOE”), down 9.2% from 18.969 MMBOE of proved reserves at year-end 2011;
*  Oil represents 49% of year-end 2012 1P reserves;
*  Year-end 2012 PV10 of $407 million, down 12.3% from $464 million at year-end 2011;
*  Proved developed (“PDP”) reserves comprised 25.2% of year-end 2012 proved reserves;
*  Year-end 2012 probable reserved totaled 5.851 MMBO and 44.980 BCFG, or 13.348 MMBOE;
*  Year-end 2012 possible reserves totaled 14.758 MMBO and 117.257 BCFG, or 34.301 MMBOE;
*  Year-end 2012 3P reserves totaled 64.875 MMBOE.

The decline in reserves related entirely to natural gas and resulted principally from a combination of lower natural gas prices and thinner sands than originally anticipated in our Mesa Verde well. Lower natural gas pricing reflected in our reserve report adversely affected well economics reducing both the total volumes and forecast revenues in our reserve report. The average benchmark prices utilized for the year-end 2012 reserve report were $94.71 per barrel of crude oil and $2.76 per MMBtu of natural gas as compared to $96.19 per barrel of crude oil and $4.11 per MMBtu of natural gas utilized for the year-end 2011 reserve report. The Mesa Verde well, while successful and incurring multiple potential pay sands, was thinner than anticipated in the Marg A sands resulting in a negative revision to 1P reserves at Vermilion 16 field of 2,637 MBOE (94% gas).

The reduction in reserves associated with lower natural gas prices and thinner sands in Mesa Verde was partially offset by increases in oil reserves following drilling of our North Tiger, Jupiter and Buddy wells and field studies at Breton Sound 32 and Grand Bay fields, which together accounted for 1.467 MMBOE of positive reserve revisions. As a result, our oil reserves increased from 42% of total reserves at year-end 2011 to 49% at year-end 2012.

An additional 0.306 MMBO and 0.797 BCFG, or 0.439 MMBOE, of proved undeveloped (“PUD”) reserves with PV10 of $18.26 million, as reflected in the Company’s year-end reserve report, have been converted to PDP reserves during the first quarter of 2013.

Also, during the first quarter of 2013, Saratoga was the apparent high bidder on four leases totaling 19,814 acres in the Central Gulf of Mexico. Preliminary unaudited reserve potential for those leases has been estimated internally at 51.2 gross MMBOE, of which 5.4 gross MMBOE are expected to subsequently be qualified as PUD reserves.

Development Plans

*  Low risk recompletions, thru-tubing plugbacks and workovers from inventory of 58 proved developed non-producing (“PDNP”) opportunities in 7 fields;
*  Development of proved undeveloped (“PUD”) reserves from inventory of 89 PUD opportunities in 28 wellbores in 4 fields; and
*  Strategic partnerships and joint ventures for risk-sharing on exploratory drilling of deep and ultra-deep prospects at Grand Bay and Vermilion 16 and on new Central Gulf of Mexico leases.

Our near term development plans are focused on proved undeveloped opportunities and conversion of PDNP opportunities. At December 31, 2012, permitting had been completed on 2 proved undeveloped wells and permitting was underway on 7 additional proved undeveloped wells. We presently anticipate drilling up to 6 proved undeveloped wells during 2013, including the Buddy well which was drilled during 2012 and completed in early 2013 and the Roux Toux well, which was drilled and completed in Q1 2013, and 5 to 6 development wells annually thereafter.

At Grand Bay, approximately 20 shut-in wells have been identified that appear to be candidates for tubing replacement and resumption of production. These wells were each producing between 20-50 BOPD prior to being shut-in. The tubing replacement program involves mounting a pulling unit on a shallow water barge at an estimated cost of less than $200,000 per well. If successful, for an approximate cost of $4 million, up to 400 BOPD might be added to production, representing a payout of less than 6 months.

Saratoga continues to monitor ongoing exploratory drilling operations of ultra-deep prospects near our lease holdings and to conduct discussions with potential partners regarding the development of our ultra-deep prospects. The results of ongoing third party ultra-deep exploratory drilling are expected to drive the ultimate determination regarding potential development of Saratoga’s ultra-deep prospects.

Subject to final award of leases by the Bureau of Ocean Energy Management, Saratoga also intends to seek partners to drill, develop and operate its prospects in the Central Gulf of Mexico on which it was the apparent high bidder.

Supplementing the development program, Saratoga is pursuing several initiatives in Main Pass 25 to increase production and improve economics in that field. Those initiatives are also expected to reduce dependency upon third party facilities operators which caused the shut-in of most of the Company’s production in that field during the first quarter of 2013 due to third party production issues on a neighboring platform to which the Company produces. The initiatives include a recompletion of the 7900’ sand in the SL 16432 #2 well, which was successfully carried out during the quarter, and pursuit of an arrangement with another operator to increase handling capacity at the Company’s facilities in Main Pass 25. Recompletion of the 7900’ sand is expected to provide sufficient gas lift gas to unload oil wells in the field. The preliminary agreement with a third party operator includes the Company’s handling of production from a new discovery in the field by the third party operator and the provision by that operator of certain equipment to upgrade the handling capacity of the Company’s Main Pass 25 facilities. If that arrangement is carried out, the Company would potentially add production handling capacity at its Main Pass 25 facilities allowing the Company to generate production handling revenues from the other operator, bring Company production from the field handled by a third party back to Main Pass 25 and reduce monthly operating costs in the field by as much as $100,000 per month while lowering line pressures and potentially increasing production in that field by up to 400 gross barrels of oil per day while adding a potential source of additional gas lift gas.

Financial Position and CAPEX Highlights

*  $32.3 million of cash on hand at December 31, 2012, up from $15.9 million at December 31, 2011;
*  $62.5 million of shareholders’ equity at December 31, 2012, up from $41.9 million at December 31, 2011;
*  $23.3 million of equity raised during 2012 from sale of common stock and warrants;
*  $25.0 million of new debt raised during 2012 from sale of senior secured notes;
*  $59.8 million of CAPEX for 2012;
*  $40 million CAPEX budgeted for 2013;
*  2013 CAPEX budget fully funded by cash on hand and projected operating cash flow;
*  Working capital adjusted debt to trailing twelve month EBITDAX of 2.9 times; and
*  Net asset value per share of approximately $9.00.

Saratoga continued to strengthen its financial position during 2012, securing $23.3 million of additional equity through the sale of common stock in a private placement and through the exercise of warrants. Saratoga further supplemented its liquidity through the sale of $25.0 million of additional senior secured notes. Supplemented by capital raised during the year, Saratoga continued to fund its operations, including its development program, from cash on hand and operating cash flows, growing its CAPEX from $9.7 million in 2010 and $25.6 million in 2011 to $59.8 million in 2012. The 2013 CAPEX budget of $40 million is expected to be fully funded from cash on hand and operating cash flow.

Management Comments
Thomas Cooke, Chairman and CEO, commented, “2012 was certainly a challenging year for Saratoga, with the effects of Hurricane Isaac, weak gas prices and a few unique projects on our plate. At the same time, management is gratified by the accomplishments during the year, particularly our ability to grow production and generate discretionary cash flow of $1.00 per share. Those were notable achievements and a credit to our entire team which was confronted with the challenges of weathering and recovering from Hurricane Isaac. We were 100% shut-in for 17 days and suffered lingering curtailment of production and delays in projects into 2013 as third-party operators brought their facilities back onto line to accommodate our production. We put on hold and deferred a number of projects in our development and maintenance program in the wake of the hurricane. Together, the shut-in of production and deferral of projects put us behind schedule relative to our development program and well below projected production and revenue targets. While we are pleased that our assets displayed resiliency in weathering the hurricane and with the efforts of our team in bringing our assets back on line, the loss of revenues and cost of coming back on line resulted in financial performance well below management’s targets for the year.

We did see positive developments during the year, including growing our production by 18%, and we believe we are well positioned going into 2013 to continue our production growth. We successfully completed all three of the development wells undertaken during 2012, adding new pool discoveries and setting up future development opportunities in the process. We solidified our lease position in Vermilion 16 and are well positioned to participate in the current ultra-deep trend with the drilling of our Mesa Verde well and are expanding and enhancing the quality of our prospect inventory through our drilling program, our reinstitution of our field reserve studies and our anticipated acquisition of four Gulf of Mexico lease blocks as a result of apparent high bids in a March 2013 lease sale. Entering 2013, we have a solid net asset value per share of approximately $9.00, what we view as a favorable hedge portfolio in place, a strong cash position and anticipated cash flow which we believe will fully fund our development program in 2013. We will focus on our deep inventory of prospects and we are confident that our development program and other initiatives, including the expected addition of up to 400 gross barrels of oil per day aggregate from our tubing replacement program, will net excellent results in 2013 and beyond.”

Conference Call Information

The company will host a conference call to discuss these results on March 27, 2013 at 10:30 AM EDT (9:30 AM CDT, 7:30 AM PDT) and interested parties in the U.S. can participate in the call by dialing (800) 736-6099. Interested international parties can participate in the call by dialing (914) 495-8532. The participant passcode for both the U.S. and international call is 20088841. Alternatively, the audio content of the call can be accessed on the Company’s web site at www.saratogaresources.com. The call will be archived on the Company web site for parties who are unable to listen to the live call.

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,027 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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 future ability to fund the company’s development program and grow reserves, production, revenues and profitability, ability to reach and sustain target production levels, ability to secure commitments to participate in exploration of deep shelf prospects, ability to secure leases and the ultimate outcome of such efforts. 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.

Download the Financial Statements

Houston, TX – March 21, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) today announced that it was the apparent high bidder on four leases at the Central Gulf of Mexico Lease Sale 227 held yesterday in New Orleans, Louisiana.

The four lease blocks covered by the bids total 19,814 acres on a net and gross basis and are all located in the shallow Gulf of Mexico Shelf in water depths of 13 to 77 feet. Lease bonuses under the bids total $880,000. The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) will review all apparent high bids prior to awarding the lease blocks to Saratoga.

Andy C. Clifford, Saratoga’s President, commented, “We are extremely pleased at the prospect of securing these four blocks in our first foray into the Gulf of Mexico Shelf. The leases include two in the Ship Shoal area and two in the Vermilion area. Our internal gross potential reserve estimates, as yet unaudited by third party engineers, relative to these blocks are 51.3 million barrels of oil equivalent (“MMBOE”), of which 5.4 MMBOE are expected to be qualified as proved undeveloped (“PUD”). We are attracted by the high liquid content of these reserves, which we estimate to exceed 8 MMBO of gross 3P reserves.”

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,027 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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 statements regarding the ultimate award of the lease blocks following BOEMRE review, the ultimate reserves associated with the lease blocks, the portion of reserves qualifying as PUD and constituting liquids and the ultimate ability to develop the blocks and results of such efforts. 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.

HOUSTON, TX – (Business Wire) – March 13, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA) and Energy XXI (Nasdaq: EXXI) (LSE:EXXI) will host a third annual reception for Louisiana Governor Bobby Jindal at the Windsor Court Hotel in New Orleans on Wednesday, March 27, 2013 (6:00-8:00 pm CDT). Saratoga and Energy XXI will be joined by a number of co-hosts, including W & T Offshore, Cox Oil, Alta Mesa Holdings LP, Helis Oil & Gas and Crescent Drilling and Production, among others.

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,119 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of South Louisiana. 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 of less than 10 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 Energy XXI
Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company’s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. Seymour Pierce is Energy XXI’s listing broker in the United Kingdom. To learn more, visit the Energy XXI website at www.EnergyXXI.com.

Houston, TX – March 7, 2013 – Saratoga Resources, Inc. (NYSE MKT: SARA; the “Company” or “Saratoga”) will host a conference call to discuss its 2012 results.
The call will be held on Wednesday, March 27, 2013 at 9:30 AM CDT (10:30 AM EDT, 7:30 AM PDT). The call in phone number for those wishing to participate is (800) 736-6099 for U.S. participants and (914) 495-8532 for international participants. The participant code for both U.S. and international calls is 20088841.
The call will be webcast and archived. The webcast can be accessed on the Company’s website at www.saratogaresources.net.
About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,119 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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.

Hedging
The Company also provided an update of its current hedging position as follows:
Quarter Product        Volume            Price                Basis
1Q13          Oil          1,500 BOPD      $107.83      LLS & Brent
2Q13          Oil         1,000 BOPD      $108.01             Brent
3Q13          Oil            833 BOPD      $107.75              Brent
4Q13          Oil            917 BOPD       $107.88             Brent
1Q14          Oil             500 BOPD      $109.20            Brent

Management Comments
Mr. Thomas Cooke, Chairman and CEO of Saratoga Resources, said “We are pleased with the results of the QQ-25 well. The production tests were better than anticipated and the well came in under budgeted AFE costs. Continued results like this well should set the company up in 2013 to exceed its 2012 production growth rate of 18%. While it is always nice to announce a significant increase in annual production, that is particularly true this year when we had 100% of our production shut-in for approximately 17 days due to Hurricane Isaac and it was well into the 4th quarter of the year before we were able to get all of our wells back on line. We estimate that these shut-ins resulted in deferred revenue in 2012 of between $7 and $8 million dollars. In spite of those interruptions, we anticipate reporting year-end discretionary cash flow of approximately $0.97 – $1.00 per share and we think these are very strong results.”
Mr. Cooke added “As a result of weakness in natural gas prices during 2012, we anticipate that Saratoga, like many other operators, will be reporting some write-downs in year-end reserves driven by negative gas pricing revisions based on required SEC pricing models. We have recently reprocessed our proprietary Grand Bay 3-D seismic data and have re-launched detailed field studies and expect some exciting new opportunities to arise out of that effort. Back in 2008-2009, during the first phase of our field study, we increased reserves by over 40%. While we do not expect such a big increase this time around, the integration of the newly-reprocessed 3-D should yield some good results with high-grading of development drilling opportunities with a higher liquid component.”

Non-GAAP Financial Measures
Discretionary cash flow and discretionary cash flow per share are non-GAAP financial measures and supplemental financial measures used by the company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the company’s ability to internally fund exploration and development activities. Discretionary cash flow should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (“GAAP”). Discretionary cash flow excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the company’s Discretionary Cash Flow or its Discretionary Cash Flow Per Share may not be comparable to similarly titled measures used by other companies.
About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,119 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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. 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.

Mr. Andy Clifford, President of Saratoga, will make the presentation at 8:50 AM PST, 11:50 AM EST on Wednesday, February 20, 2013. The conference dates are February 19-21 and it will be held at the Omni Hotel in San Francisco, CA. Interested parties can view the presentation via webcast at www.saratogaresources.com.

About Saratoga Resources
Saratoga Resources is an independent exploration and production company with offices in Houston, Texas and Covington, Louisiana. Principal holdings cover 32,119 gross/net acres, mostly held-by-production (all depths), currently located in the transitional coastline and protected in-bay environment on parish and state leases of south Louisiana. 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 of less than 10 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.