1096339--4/14/2010--SARATOGA_RESOURCES_INC

related topics

{gas, price, oil}

{acquisition, growth, future}

{loss, insurance, financial}

{debt, indebtedness, cash}

{operation, natural, condition}

{cost, operation, labor}

{regulation, change, law}

{loan, real, estate}

{personnel, key, retain}

{cost, regulation, environmental}

{control, financial, internal}

{condition, economic, financial}

{product, candidate, development}

{cost, contract, operation}

Our pending bankruptcy raise questions as to our ability to continue as a going concern and may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities and preserve the value of our equity. Our leverage and debt service obligations may adversely affect our cash flow and our ability to find and develop reserves. Because we have a limited history operating our existing properties, you may not be able to evaluate our current and future business prospects accurately. We may not be able to generate sufficient cash flow to meet our debt service and other obligations due to events beyond our control. We expect to have substantial capital requirements, and we may be unable to obtain needed financing on satisfactory terms. We have been, and may continue to be, adversely affected by general economic conditions Risks Associated with Acquisitions and Our Risk Management Program We may be unable to successfully integrate the operations of the properties we acquire. We may not realize all of the anticipated benefits from our acquisitions. If we are unable to effectively manage the commodity price risk of our production if energy prices fall, we may not realize the anticipated cash flows from our acquisitions. If we place hedges on future production and encounter difficulties meeting that production, we may not realize the originally anticipated cash flows. Risks Related to the Oil and Gas Business Oil and natural gas prices are volatile, and a decline in oil and natural gas prices would affect our financial results and impede growth. Reserve estimates depend on many assumptions that may turn out to be inaccurate and any material inaccuracies in the reserve estimates or underlying assumptions of our properties will materially affect the quantities and present value of those reserves. Unless we replace crude oil and natural gas reserves our future reserves and production will decline. Competition for oil and gas properties and prospects is intense and some of our competitors have larger financial, technical and personnel resources that could give them an advantage in evaluating and obtaining properties and prospects. The unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services could adversely affect our ability to execute exploration and exploitation plans on a timely basis and within budget, and consequently could adversely affect our anticipated cash flow. The geographic concentration of our properties subjects us to an increased risk of loss of revenue or curtailment of production from factors affecting the Louisiana Gulf Coast specifically. Drilling for natural gas and oil is a speculative activity any involves many uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses. The properties we acquire may not produce as projected, and we may be unable to determine reserve potential, identify liabilities associated with the acquired properties or obtain protection from sellers against such liabilities. Market conditions or transportation impediments may hinder access to oil and gas markets or delay production. We may not be the operator on all of our future properties and therefore may not be in a position to control the timing of development efforts, the associated costs, or the rate of production of the reserves on such properties. Our insurance may not protect us against all business and operating risks. Our operations will be subject to environmental and other government laws and regulations that are costly and could potentially subject us to substantial liabilities. Federal and state legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays. The adoption of derivatives legislation by Congress could have an adverse impact on our ability to hedge risks associated with our business. We depend on key personnel, the loss of any of whom could materially adversely affect future operations. Unanticipated decommissioning costs could materially adversely affect our future financial position and results of operations. If we are unable to acquire or renew permits and approvals required for operations, we may be forced to suspend or cease operations altogether.

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1096339--4/14/2010--SARATOGA_RESOURCES_INC_/TX