Value Microcaps Junior Energy

[Bobwins]

SROE.pk $5.50

This is a mixed bag. Saratoga gets their refinance so no worries about an upcoming maturity in 2012, which the lenders would not want to extend. That eliminates a fire drill which any big producer would not want to happen while they were involved in a JV with Saratoga on one of the shallow water, Deep Gulf prospects like Invictus. Hopefully this clears the way for real negotiations and a good JV for SROE.

The negative is that even in this era of cheap money, Saratoga had to pay more than when they exited from bankruptcy. They are paying 13% to replace 11.5% money. The maturity in 2016 is the obvious benefit but it came at a price.

Hopefully a couple years from now, Saratoga can refinance again at sub 10% rates, which is what I was expecting.

Still overall this is a big positive for Saratoga. The refinance is done and hopefully the beginning of a long series of good news for Saratoga.






Press Release Source: Saratoga Resources, Inc. On Thursday July 7, 2011, 3:59 pm
HOUSTON--(BUSINESS WIRE)-- Saratoga Resources, Inc. (OTCQB: SROE) announced today the pricing of its private placement of $127.5 million of 12½% Senior Secured Notes due 2016. The offering was sold at 98.221% of par to yield 13.0% to maturity. The offering, which is subject to customary closing conditions, is expected to settle on July 12, 2011.

Net proceeds from the offering, together with proceeds of a concurrent equity placement, will be used to repay substantially all of Saratoga’s existing debt, including all debt under its existing credit facilities.

The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The notes may be resold by the initial purchaser pursuant to Rule 144A and Regulation S under the Securities Act.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities. This notice is being issued pursuant to and in accordance with Rule 135c under the Securities Act.