Sabine Oil & Gas LLC Announces Third Quarter 2013 Financial and Operational Results

 Sabine Oil & Gas LLC Announces Third Quarter 2013 Financial and Operational
                                   Results

PR Newswire

HOUSTON, Nov. 20, 2013

HOUSTON, Nov. 20, 2013 /PRNewswire/ -- Sabine Oil & Gas LLC today reported its
unaudited third quarter 2013 financial and operating results.

(Logo:http://photos.prnewswire.com/prnh/20130325/MM83201LOGO)

Key Results:

  oTotal production of 184 MMcfe/d represents a 12% increase over the prior
    quarter and a 48% increase over the third quarter of 2012. Record oil
    production of 4,161 Bbl/d represents a 26% increase over the prior quarter
    and a 445% increase over the third quarter of 2012.
  oOil and natural gas liquids production volumes comprised 57% of revenues
    and 31% of total production for the quarter.
  oAdjusted EBITDA for the third quarter of 2013 was $81 million,
    representing a 25% increase over the prior quarter.
  oSubsequent to the end of the third quarter, the borrowing base under our
    revolving credit facility was increased from $550 million to $675 million,
    a 23% increase.
  oIn the Eagle Ford Shale, the Company completed its first four pad-wells in
    the Sugarkane block in southern DeWitt County. The wells produced at an
    average rate per well of over 2,200 BOEPD for a 30-day period ("IP30"),
    with 16% oil and 57% liquids.
  oAlso in the Eagle Ford Shale, the Company completed its sixth well in
    northern DeWitt County (South Shiner Area), which had an IP30 of over
    1,400 BOEPD, with 50% oil and 79% liquids. The prior five wells (completed
    in the first and second quarters of 2013) had an average IP30 of
    approximately 1,460 BOEPD, with 46% oil and 76% liquids.
  oIn the Eagle Ford in North Lavaca County (the North Shiner Area) , the
    Company began flowing back a well subsequent to quarter end with
    encouraging results. The well reached a 24-hour production rate of 1,398
    BOEPD, with 75% oil and 92% liquids.
  oDuring the third quarter, the Company entered into a joint development
    agreement in the Eagle Ford Shale in northern DeWitt and southern Lavaca
    Counties to earn up to 5,730 net acres by drilling and completing two
    wells by April of 2014.
  oIn North Texas, the Company completed three Granite Wash wells which had
    an average IP30 of over 1,470 BOEPD, with 61% oil and 82% liquids.
  oIn East Texas, the Company completed one Cotton Valley horizontal well
    during the quarter and one subsequent to quarter-end, for a total of four
    wells in 2013 to date. The four 2013 wells had an average IP30 of 11.1 
    MMcfe/d, with 29% liquids. The Company is encouraged by the strong
    economics of these and other recent Cotton Valley wells and our extensive
    drilling inventory in the play.
  oThrough the end of the third quarter, the Company has completed seven of
    the fifteen Haynesville Shale wells covered under the joint development
    agreement that was executed in the first quarter of 2013. The seven 2013
    wells had an average IP30 of over 9.1 MMcf/d. The remaining eight wells
    are scheduled to be completed in 2014.

Commenting on the quarter's results, Sabine's Chief Executive Officer David
Sambrooks noted "In the third quarter Sabine delivered excellent well results
in all of our major plays – The Eagle Ford, Granite Wash, Cotton Valley and
the Haynesville. Our well results drove impressive statistics for the quarter:
49% production growth over third quarter 2012, an increase in liquids
production to 31% of total production compared to 14% inthird quarter 2012
and a 25% increase in EBITDA compared to second quarter 2013. In addition to
our production and EBITDA growth we added substantial inventory in the Eagle
Ford during the quarter through the addition of approximately 8,000 acres
contiguous to our current holdings, bringing our total Eagle Ford acreage
position to approximately 30,000 acres."

Results of the Third Quarter 2013

Production volumes during the three months ended September 30, 2013 were 16.9
Bcfe, an increase of 5.46 Bcfe or approximately 48% from third quarter 2012
production. The increase in production is primarily due to an increase in oil
and natural gas liquids production attributable to our North Texas and South
Texas acquisitions and our active and successful development program in these
regions.

Revenues from production of natural gas, oil and natural gas liquids increased
from $41.6 million in the third quarter of 2012 to $96 million in the third
quarter of 2013, an increase of 131%. This increase of $54.4 million was a
result of an increase in average prices per Mcfe of 56%, coupled with an
increase in production of 48%.

During the third quarter of 2013, the Company's realized average price for
natural gas including hedges was $4.75 per Mcf, or $1.20 per Mcf higher than
the Company's unhedged realized average price of $3.55 per Mcf. The Company's
realized average price of oil including hedges was $95.49 per Bbl, or $7.03
per Bbl lower than the Company's unhedged realized average price of $102.52per
Bbl. In the third quarter of 2013, our hedged volumes were approximately 78%
of both our natural gas and oil volumes. Effective May 8^th 2013, the Company
elected to de-designate all commodity contracts that were previously
designated as cash flow hedges and elected to discontinue hedge accounting
prospectively. As a result of discontinuing hedge accounting, the Company
recognized the settlements on derivative instruments for the third quarter of
2013 of $11.3 million under "Gain (loss) on derivative instruments" in the
Other income (expense) section. In the third quarter of 2012, our hedged
volumes were approximately 73% and 46% of our natural gas and oil volumes,
respectively, which resulted in a realized gain on such derivative instruments
of $26.4 million.

Lease operating expenses increased from $9.0 million in the third quarter of
2012 to $11.0 million in the third quarter of 2013, an increase of 22%. The
increase in lease operating expense of $2.0 million is primarily due to our
2012 acquired properties with offsetting decreases due to the sale of our
Rockies properties during the second quarter of 2012. Lease operating expenses
decreased from $0.79 per Mcfe in the third quarter of 2012 to $0.65 per Mcfe
in the third quarter of 2013. The decrease of $0.14 per Mcfe is primarily due
to the commencement of lower cost production in South Texas and North Texas
following our December 2012 acquisitions in these areas as well as a lower
realized cost on our higher volume East Texas 2013 completions.

Marketing, gathering, transportation and other expenses decreased from $4.4
million in the third quarter of 2012 to $4.3 million in the third quarter of
2013, a decrease of 3%. Marketing, gathering, transportation and other
expenses decreased on a per unit basis from $0.39 per Mcfe in the third
quarter of 2012 to $0.25 per Mcfe in the third quarter of 2013. The per unit
basis decrease is primarily associated with our North Texas and South Texas
regions resulting from our 2012 acquisitions and current year development
activities, as well as a reduction in fees on a per unit of production basis
attributable to volumes from our 2013 completions in East Texas, and the sale
of the Rockies assets.

Production and ad valorem taxes increased from $2.0 million in the third
quarter of 2012 to $5.0 million in the third quarter of 2013, an increase of
153%. Production and ad valorem taxes increased on a per unit basis from $0.17
per Mcfe in the third quarter of 2012 to $0.30 per Mcfe in the third quarter
of 2013. The increase is primarily related to increased production in our
North Texas and South Texas regions which are incurring higher production
taxes on oil and natural gas liquids production, which was offset by a slight
decrease in our East Texas production. The Company also expects continuous
volatility with production taxes as a result of timing of approval for high
cost gas tax exemptions. Production taxes as a percentage of natural gas and
oil revenues were 5% for the both the third quarter of 2013 and 2012.

General and administrative expenses increased from $5.1 million in the third
quarter of 2012 to $5.9 million in the third quarter of 2013, an increase of
$0.8 million, or 16%. This increase is primarily related to an increase in
overhead and internal costs associated with our expanding business. General
and administrative expenses decreased from $0.44 per Mcfe in the third quarter
of 2012 to $0.35 per Mcfe in the third quarter of 2013.

DD&A increased from $20.3 million in the third quarter of 2012 to $37.5
million in the third quarter of 2013, an increase of $17.2 million. Depletion,
depreciation, and amortization increased from $1.77 per Mcfe in the third
quarter of 2012 to $2.22 per Mcfe in the third quarter of 2013, or an increase
of 25%. Increase in the DD&A rate is primarily the result of our December 2012
acquisitions and increased production.

In the third quarter of 2012, there were non-cash impairment charges related
to oil and natural gas properties of $233.5 million and impairments related to
the write-down of carrying value of certain sizes of casing inventory of $0.4
million. There were no material impairments recognized in the third quarter of
2013 as a result of a favorable change in the average unweighted first day of
the month pricing for the 12 months ended September 30, 2012 of $2.83 per
MMbtu versus $3.60 per MMbtu as of September 30, 2013 as well as favorable
performance from our 2013 development activities.

Interest expense increased from $11.4 million for the third quarter of 2012 to
$25.3 million for the third quarter of 2013, an increase of $13.9 million,
primarily as a result of the Term Loan. Additionally, as required under GAAP,
we capitalized $3.2 million and $1.0 million of interest expense for the three
months ended September 30, 2013 and 2012, respectively.

Net loss on derivative contracts was $5.3 million and $7.5 million for the
third quarter of 2013 and 2012, respectively. The amount of future gain or
loss recognized on derivative instruments is dependent upon future commodity
prices.

Results of the nine months ended September 30, 2013

Production volumes during the nine months ended September 30, 2013 were 44.4
Bcfe, an increase 6.7 Bcfe or approximately 18% from the nine months ended
September 30, 2012 production. The increase in production is primarily due to
an increase in oil and natural gas liquids production attributable to our
North Texas and South Texas acquisitions and our active and successful
development program in these regions, offset lower East Texas volumes and sale
of the Rockies' assets.

Revenues from production of natural gas, oil and natural gas liquids increased
from $129 million in the first nine months of 2012 to $244.9 million in the
first nine months of 2013, an increase of 90%. This increase of $115.8 million
was a result of an increase in average prices per Mcfe of 61% coupled with an
increase in production of 18%.

During the nine months ended September 30, 2013, the Company's realized
average price for natural gas including hedges was $4.88 per Mcf, or $1.21 per
Mcf higher than the Company's unhedged realized average price of $3.67 per
Mcf. The Company's realized average price of oil including hedges was $92.37
per Bbl, or $4.11 per Bbl lower than the Company's unhedged realized average
price of $96.48 per Bbl. In the first nine months of 2013, our hedged volumes
were approximately 85% and 68% of our natural gas and oil volumes,
respectively. Effective May 8^th 2013, the Company elected to de-designate all
commodity contracts that were previously designated as cash flow hedges and
elected to discontinue hedge accounting prospectively. As a result of
discontinuing hedge accounting, the Company recognized the settlements on
derivative instruments from January 2013 to May of 2013 of $20.2 million under
"Gain on derivative instruments" in the revenue section and recorded
settlements on derivative instruments from June 2013 to September 2013 of
$13.8 million under "Gain (loss) on derivative instruments" in the Other
income (expense) section. In the first nine months of 2012, our hedged
volumes were approximately 66% and 45% of our natural gas and oil volumes,
respectively, which resulted in a realized gain on such derivative instruments
of $83.2 million.

Lease operating expenses decreased from $32.3 million in the first nine months
of 2012 to $30.7 million in the first nine months of 2013, a decrease of 5%.
The decrease in lease operating expense of $1.6 million is primarily due to
$3.1 million of one-time compliance and regulatory costs in the first nine
months of 2012 applicable to our 2011 property acquisitions and the sale of
our Rockies properties in the second quarter of 2012, with offsetting
increases due to our December 2012 acquired properties. Lease operating
expenses decreased from $0.86 per Mcfe in the first nine months of 2012 to
$0.69 per Mcfe in the first nine months of 2013. The decrease of $0.17 per
Mcfe is primarily due to the commencement of lower cost production in South
Texas and North Texas following our December 2012 acquisitions in these areas
as well as a lower realized cost on our higher volume East Texas 2013
completions.

Marketing, gathering, transportation and other expenses decreased from $13.2
million in the first nine months of 2012 to $12.5 million in the first nine
months of 2013, a decrease of 5%. Marketing, gathering, transportation and
other expenses decreased on a per unit basis from $0.35 per Mcfe in the first
nine months of 2012 to $0.28 per Mcfe in the first nine months of 2013. The
per unit basis decrease is primarily associated with our North Texas and South
Texas regions resulting from our 2012 acquisitions and current year
development activities, as well as a reduction in fees on a per unit of
production basis attributable to volumes from our 2013 completions in East,
and the sale of the Rockies assets.

Production and ad valorem taxes increased from $5.1 million in the first nine
months of 2012 to $12.6 million in the first nine months of 2013, an increase
of 148%. Production and ad valorem taxes increased on a per unit basis from
$0.13 per Mcfe in the first nine months of 2012 to $0.28 per Mcfe in the first
nine months of 2013. The increase is primarily related to increased
production in our North Texas and South Texas regions which are incurring
higher production taxes on oil and natural gas liquids production, which was
offset by a slight decrease in our East Texas production. The Company also
expects continuous volatility with production taxes as a result of timing of
approval for high cost gas tax exemptions. Production taxes as a percentage of
natural gas and oil revenues were 5% and 4% for the first nine months of 2013
and 2012, respectively.

General and administrative expenses increased from $15.3 million in the first
nine months of 2012 to $18.8 million in the first nine months of 2013, an
increase of $3.5 million, or 23%, as a result of increased legal and
consulting fees related to various current year projects and higher overhead
associated with our growing business. General and administrative expenses
increased from $0.41 per Mcfe in the first nine months of 2012 to $0.42 per
Mcfe in the first nine months of 2013.

DD&A increased from $71.6 million in the first nine months of 2012 to $97.7
million in the first nine months of 2013, an increase of $26.1 million.
Depletion, depreciation, and amortization increased from $1.90 per Mcfe in the
first nine months of 2012 to $2.20 per Mcfe in the first nine months of 2013,
or an increase of 16%. Increase in the DD&A rate is primarily the result of
our December 2012 acquisitions and increased production.

In the first nine months of 2012, there were non-cash impairment charges
related to oil and natural gas properties of $654.0 million, impairment
charges for gas gathering and processing equipment of $11.5 million and
impairment charges for other assets of $0.7 million. In the first nine months
of 2013, there were non-cash impairment charges related to oil and natural gas
properties of $12.7 million. These 2013 impairment charges were recognized in
the first quarter of 2013. There were no material impairments recognized in
the second and third quarters of 2013 as a result of favorable average
unweighted first day of the month pricing for the 12 months ended September
30, 2012 of $2.83 per MMbtu versus $3.60 per MMbtu as of September 30, 2013 as
well as favorable performance from our 2013 development activities.

Interest expense increased from $34.5 million for the first nine months of
2012 to $73.6 million for the first nine months of 2013, an increase of $39.1
million, primarily as a result of the Term Loan. Additionally, as required
under GAAP, we capitalized $10.1 million and $3.2 million of interest expense
for the first nine months of 2013 and 2012, respectively.

During the first nine months of 2013, net gain on derivatives contracts of
$14.0 million compared to a net loss on derivatives of $11.4 million for the
first nine months of 2012. The amount of future gain or loss recognized on
derivative instruments is dependent upon future commodity prices.

The Company made a one- time payment to Nabors Industries Ltd. ("Nabors") in
the amount of $10 million in order to satisfy Sabine Oil & Gas Holdings LLC's
payment obligation to Nabors in conjunction with its equity interest sale in
December 2012.

Debt/Liquidity

As of September 30, 2013, our borrowing base under our First Lien Credit
Facility was $550 million, and we had an outstanding balance of approximately
$348.7 million, net of cash on hand. As of November 7, 2013, our borrowing
base has been re-determined and increased from $550 million to $675 million.
After giving the effect to our re-determined borrowing base, we were able to
incur approximately $310 million of secured indebtedness under our credit
facility. As of November 20, 2013, the Company has drawn an additional $37
million and repaid $3 million and had an outstanding balance of $399 million.

Capital Expenditures

As of September 30, the Company has incurred capital expenditures of
approximately $293 million, of which $249 million was incurred on drilling and
completion activities and $44 million on leasing expenditures and other items.
For the fourth quarter of 2013, the Company expects to expend approximately
$125 million on drilling and completion activities and approximately $27
million on leasing and other activities.

Hedging:

For the remainder of 2013 (October - December), the Company has NYMEX hedges
in place on approximately 124,300 MMbtu/d of its projected natural gas
production, at a weighted average price of $4.81/ MMBtu, and 4,000 Bbl/day of
oil production at a weighted average price of $95.83/bbl. For the calendar
year of 2014, the Company has hedge contracts in place for 115,000 MMbtu/d of
its projected natural gas production at a weighted average price of
$4.31/MMbtu, and 3,800 Bbl/day of oil production at a weighted average price
of $91.98/Bbl. For the calendar year of 2015, the Company has hedge contracts
in place for 1,000 Bbl/d of oil production at $89.50/Bbl.

Sabine will host a conference call at 9:30 a.m. Central Time (10:30 a.m.
Eastern Time) on November 20, 2013. To participate in the call, dial
1-888-606-5934 and international participants should dial 1-517-308-9375. The
participant passcode is SABINE2013. A replay of the conference call will be
available through the Company's website at http://www.sabineoil.com for the
third quarter ended September 30, 2013.

Sabine Oil & Gas LLC is an independent energy company engaged in the
acquisition, production, exploration and development of onshore oil and
natural gas properties in the United States. Our current operations are
principally located in the Eagle Ford Shale in South Texas, the Cotton Valley
Sand and Haynesville Shale in East Texas, and the Granite Wash and Cleveland
Sand in the Texas Panhandle.

This press release includes "forward-looking statements." All statements,
other than statements of historical facts, included in this press release that
address activities, events or developments that the Company expects, believes
or anticipates will or may occur in the future are forward-looking statements.
These statements include, but are not limited to forward-looking statements
about plans, strategies, objectives and anticipated financial and operating
results of the Company, including the Company's drilling program, production,
hedging activities, capital expenditure levels and other guidance. These
statements are based on certain assumptions made by the Company based on
management's experience and perception of historical trends, current
conditions, anticipated future developments and other factors believed to be
appropriate. Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company, which may
cause actual results to differ materially from those implied or expressed by
the forward-looking statements. These risks include, but are not limited to,
commodity price volatility, inflation, lack of availability of drilling and
production equipment and services, environmental risks, drilling and other
operating risks, regulatory changes, the uncertainty inherent in estimating
natural gas and oil reserves and in projecting future rates of production,
cash flow, access to capital and the timing of development expenditures. For
a detailed list of the Company's risk factors, please consult the Company's
Annual Report and subsequent quarterly reports posted at www.sabineoil.comand
other press releases.

Any forward-looking statement speaks only as of the date on which such
statement is made and the Company undertakes no obligation to correct or
update any forward-looking statement, whether as a result of new information,
future events or otherwise.

Sabine Oil & Gas LLC
Operational and Financial
Statistics (unaudited)
                                     Three Months Ended  Nine Months Ended
                                     September 30,       September 30,
                                     2013      2012      2013       2012
Oil, natural gas and NGL sales by
product (in thousands):
Natural gas                          $ 41,378  $ 27,387  $ 115,495  $  79,650
Oil                                  39,250    6,934     90,404     21,059
NGL                                  15,379    7,269     38,987     28,358
Total                                $ 96,007  $ 41,590  $ 244,886  $ 129,067
Production data:
Natural gas (Bcf)                    11.66     9.81      31.45      32.20
Oil (MBbl)                           382.85    70.70     937.02     215.21
NGL (MBbl)                           489.74    200.88    1,214.54   689.95
Combined (Bcfe)(1)                   16.90     11.44     44.36      37.63
Average prices before effects of
economic hedges (2):
Natural gas (per Mcf)                $3.55     $2.79     $3.67      $2.47
Oil (per Bbl)                        $102.52   $98.08    $96.48     $97.85
NGL (per Bbl)                        $31.40    $36.19    $32.10     $41.10
Combined (per Mcfe)(1)               $5.68     $3.64     $5.52      $3.43
Average realized prices after
effects of economic hedges (2):
Natural gas (per Mcf)                $4.75     $5.48     $4.88      $5.06
Oil (per Bbl)                        $95.49    $98.08    $92.37     $97.85
NGL (per Bbl)                        $31.40    $36.19    $32.10     $41.10
Combined (per Mcfe)(1)               $6.35     $5.94     $6.29      $5.64
Average costs (per Mcfe)(1):
Lease operating                     $0.65     $0.79     $0.69      $0.86
Workover                            $0.05     $0.04     $0.02      $0.05
Marketing, gathering,                $0.25     $0.39     $0.28      $0.35
transportation and other
Production and ad valorem taxes      $0.30     $0.17     $0.28      $0.13
General and administrative           $0.35     $0.44     $0.42      $0.41
Depletion, depreciation and          $2.22     $1.77     $2.20      $1.90
amortization

(1) Oil production was converted at six Mcf per Bbl to calculate combined
    production and per Mcfe amounts.
    Average prices shown in the table reflect prices both before and after the
(2) effects of our cash settlements on commodity hedging transactions. Our
    calculation of such effects includes gains or losses on cash settlements
    for commodity derivatives.



Sabine Oil & Gas LLC
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                                 Three Months Ended     Nine Months Ended

                                 September 30,          June 30,
                                 2013      2012         2013       2012
                                 (in thousands)
Revenues
    Oil, natural gas and         $96,007   $41,590      $244,886   $129,067
    natural gas liquids sales
    Gain on derivative           -         27,060       20,209     85,135
    instruments
    Other                       253       48           627        (53)
Total revenues                   $96,260   $68,698      $265,722   $214,149
Operating expenses
    Lease operating             11,017    9,019        30,724     32,304
    Workover                    817       498          1,078      1,757
    Marketing, gathering,        4,286     4,429        12,506     13,217
    transportation and other
    Production and ad valorem    4,996     1,976        12,564     5,059
    taxes
    General and administrative  5,882     5,058        18,812     15,292
    Depletion, depreciation and  37,518    20,296       97,695     71,592
    amortization
    Accretion                    227       199          655        680
    Impairments                  2         233,923      12,725     666,223
    Loss on sale of assets       -         9,880        -          9,880
Total operating expenses         64,745    285,278      186,759    816,004
Other income (expenses)
    Interest expense             (25,329)  (11,396)     (73,625)   (34,456)
    Gain (loss) on derivative    5,932     (8,212)      27,744     (13,340)
    instruments
    Other income (expenses)      82        16           (9,879)    (292)
Total other expenses             (19,315)  (19,592)     (55,760)   (48,088)
Net income (loss) including      12,200    (236,172)    23,203     (649,943)
noncontrolling interests
Less: Net income (loss)
applicable to noncontrolling     -         (14)         -          17
interests
Net income (loss) applicable to  $ 12,200  $ (236,186)  $ 23,203  $ (649,926)
controlling interests



Sabine Oil & Gas LLC
ADJUSTED EBITDA (unaudited)
                                Three Months Ended     Nine Months Ended
                                September 30,          September 30,
                                2013      2012         2013        2012
                                (in thousands)
Net income (loss) applicable    $ 12,200  $ (236,186)  $  23,203  $ (649,926)
to controlling interests
Reconciliation to derive
Adjusted EBITDA (1):
 Interest, net of             25,329    11,396       73,625      34,456
capitalized interest
 Depletion, depreciation and  37,518    20,296       97,695      71,592
amortization
 Impairments                  2         233,923      12,725      666,223
 Other (2)                    -         -            10,001      333
 Rent expense and             (27)      (133)        (222)       (399)
amortization of deferred rent
 Accretion                   227       199          655         680
 Gain on derivative           (5,654)   (18,834)     (47,094)    (71,753)
instruments
 Option premium amortization  (278)     (14)         (859)       (42)
 Derivative instruments       11,271    26,362       33,981      83,235
settlements received
 Net loss (income)
applicable to noncontrolling    -         14           -           (17)
interests
 Loss of sale of assets       -         9,880        -           9,880
Adjusted EBITDA (1)             $ 80,588  $  46,903  $ 203,710   $ 144,262
 Pro forma adjustments (3)    -         20,375       -           56,756
Adjusted Pro forma EBITDA (1)   $ 80,588  $  67,278  $ 203,710   $ 201,018
(3)

   Adjusted EBITDA is a non-GAAP financial measure. We use Adjusted EBITDA as
   a supplemental financial measure. Adjusted EBITDA is calculated in a manner
   consistent with the indenture governing our 2017 Notes and our senior
   secured revolving credit facility as net income (loss) before interest,
   taxes, depreciation and amortization, as further adjusted to include other
   adjustments, such as impairment, accretion expense, non-cash hedge gains or
   losses and other non-cash charges and pro forma adjustments for
   acquisitions and divestitures that may not be comparable to similarly
   titled measures, employed by other companies. Adjusted EBITDA is a measure
   of performance calculated in accordance with GAAP. Adjusted EBITDA should
1. not be considered in isolation or as a substitute for operating income, net
   income or loss, cash flows provided by operating, investing and financing
   activities, or other income or cash flow statement data prepared in
   accordance with GAAP. Adjusted EBITDA provides no information regarding a
   company's capital structure, borrowings, interest costs, capital
   expenditures, and working capital movement or tax position. Adjusted EBITDA
   do not represent funds available for discretionary use because those funds
   are required for debt service, capital expenditures, working capital, and
   other commitments and obligations. However, our management team believes
   Adjusted EBITDA is useful to an investor in evaluating our company because
   these measures:
                 are widely used by investors in the natural gas and oil
                 industry to measure a company's operating performance without
                 regard to items excluded from the calculation of such term,
   •             which can vary substantially from company to company
                 depending upon accounting methods and book value of assets,
                 capital structure and the method by which assets were
                 acquired, among other factors;
                 help investors to more meaningfully evaluate and compare the
   •             results of our operations from period to period by removing
                 the effect of our capital structure from our operating
                 structure; and
                 is used by our management team for various purposes,
                 including strategic planning and forecasting. Adjusted EBITDA
   •             is also the basis for covenants under the indenture governing
                 our 2017 Notes regulating future debt issuance and restricted
                 payments and pursuant to maintenance covenants under our
                 senior secured revolving credit facility.
   The Company was requested by Holdings to make a distribution of $10 million
2. to Nabors, in June 2013 which is reflected in "Other income (expense)" in
   the Consolidated statement of Operations.
   Pro forma adjustments reflect the impact of net revenues and operating
3. expenses of acquisitions as they have occurred as of the beginning of the
   fiscal year of acquisitions.



Sabine Oil & Gas LLC
Selected Balance Sheet Data (unaudited)
                                          September 30,      December 31,
                                          2013               2012
                                          (in thousands)
Assets:
 Total current assets                  $           $       
                                          119,765            98,371
 Total property plant and equipment,   1,529,766          1,345,626
net
 Other non-current assets              208,608            211,058
Total assets                              $             $     
                                          1,858,139         1,655,055
Liabilities and member's capital:
 Total current liabilities             $           $       
                                          198,568            85,920
 Credit facility                       365,000            405,000
 Term loan                             644,861            490,127
 Senior notes                          347,882            347,411
 Other non-current liabilities         28,952             36,748
Total Liabilities                        1,585,263          1,365,206
 Member's capital                      272,876            289,849
Total Liabilities and member's capital    $             $     
                                          1,858,139         1,655,055
Selected Cash Flow Data
                                          Nine Months Ended September 30,
                                          2013               2012
                                          (in thousands)
Net cash provided by operating            $           $      
activities                                139,771            106,973
Net cash used in investing activities     (237,531)          (88,762)
Net cash provided by (used in) financing  107,845            (20,183)
activities
Net increase (decrease) in cash and cash  10,085             (1,972)
equivalents
Cash and cash equivalents, beginning of   6,193              4,306
period
Cash and cash equivalents, end of period  $          $        
                                          16,278             2,334

SOURCE Sabine Oil & Gas LLC

Website: http://www.nfrenergy.com
Contact: Shane M. Bayless, Executive Vice President & CFO of Sabine Oil & Gas
LLC, +1-832-242-9600, corporaterelations@sabineoil.com