NEW YORK--(BUSINESS WIRE)--Jan. 3, 2006--Warren Resources, Inc.
(NASDAQ:WRES), an oil and gas exploration and development company,
today announced that effective December 31, 2005, it completed the
purchase of a 100% working interest (subject to pre-existing
unaffiliated royalty burdens of 15.4%) in the North Wilmington Unit
(NWU) oil field in the Los Angeles Basin in California for $23 million
in cash. The Company estimates that the NWU contains proved oil
reserves of approximately 23.4 million barrels gross, 19.8 million
net. The NWU currently produces approximately 400 gross barrels of oil
per day from 46 active wells and it is adjacent to the Company's
operated Wilmington Townlot Unit (WTU) in the Wilmington oil field.
The acquisition of the NWU includes 11.87 acres of fee surface
properties, a central procession facility, oil field equipment and all
lease, contract and related rights.
The Company estimates that the NWU has 1.7 million barrels of net
proved developed producing oil reserves (PDP), and 18.1 million
barrels of net proved undeveloped oil reserves (PUD) providing for
future infill drilling and secondary recovery water flood
opportunities. The NWU contains 73 inactive wells, many of which the
Company believes may be returned to production through workovers and
other remedial activities. The Company was appointed the operator of
the NWU and has budgeted $10 million in 2006 for facilities upgrades,
remedial work on 18 idle wells and drilling four new wells in the NWU.
Norman F. Swanton, Chairman & CEO, commented for Warren Resources,
"2006 should be a year of significant production growth for the
Company. Our large-scale drilling projects in the Wilmington Townlot
Unit and the North Wilmington Unit in California could provide triple
digit production growth for us in 2006. Additionally, upon completion
of the current environmental impact statement in 2006 for the Atlantic
Rim coalbed methane project in the Washakie Basin in southwest
Wyoming, we will have the flexibility to accelerate the pace of
development drilling of potentially high quality CBM wells with our
Atlantic Rim joint venture partner, Anadarko Petroleum. We look
forward to capitalizing on the Company's large acreage position and
extensive drilling opportunities in both of these areas."
About Warren Resources
Warren Resources, Inc. is a growing independent energy company
engaged in the exploration and development of domestic natural gas and
oil reserves. Warren is primarily focused on the exploration and
development of coalbed methane properties located in the Washakie
Basin in the Rocky Mountain region of Wyoming and its water flood oil
recovery programs in the Wilmington Townlot Unit and North Wilmington
Unit located in the Los Angeles Basin of California. The Company is
headquartered in New York, New York, and its exploration and
development subsidiary, Warren E&P, Inc., is based in Casper, Wyoming
and Long Beach, California.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These forward-looking
statements reflect our current views with respect to future events,
based on what we believe are reasonable assumptions. No assurance can
be given, however, that these events will occur. These statements are
subject to risks and uncertainties that could cause actual results to
differ materially, including without limitation risks of declining oil
and gas prices, competition for prospects, accuracy of reserve
estimates, estimated rates of production, increases in drilling and
lifting costs, increases in equipment and supply costs and other
factors detailed in the Company's filings with the Securities and
Exchange Commission (www.sec.gov).
CONTACT: Integrated Corporate Relations
Kathleen Heaney, 212-753-2137
SOURCE: Warren Resources, Inc.