|View printer-friendly version|
|Warren Resources Provides Operational Update|
Warren continues to execute successfully on its five core business strategies: right sizing capital spending; optimizing current assets and protecting production against commodity risk; increasing liquidity; positioning for commodity price recovery; and pursuing selective growth opportunities.
Warren previously announced a revised capital budget of
Warren continues to review other opportunities for debt reduction and, with this additional liquidity, believes that it is well positioned to weather the current commodity market conditions while seeking to capture opportunities in its core areas. The Company has the ability to return to drilling quickly in
Production & Cost Optimization Update
The Company estimates that its oil production for the second quarter of 2015 was approximately 250 thousand barrels (MBbl), which is at the upper end of the quarterly guidance range of 235 to 255 thousand barrels. Oil production performed in line with the Company's 1P reserve projections1 for this period.
The Company also estimates that its gas production for the second quarter of 2015 was approximately 7.8 billion cubic feet (Bcf), which was also at the upper end of its quarterly guidance range of 7 to 8 Bcf. Warren's Marcellus business unit was the predominant driver of the Company's natural gas production, performing well above 1P reserve projections1 for the quarter. Once the curtailments from early in the first quarter were lifted, Marcellus production immediately returned to prior levels, including strong results from two recently completed lower Marcellus wells, which tested at a combined 3P production rate1 of 30 MMcf per day.
Warren has been keenly focused on operational efficiencies and cost savings in 2015. The Company has targeted annual savings in lease operating expenses (LOEs) in the range of
Marcellus Business Unit Operations
Warren is executing on its 2015 operational plan in the Marcellus, having successfully drilled and set pipe for two Upper Marcellus wells. Completion operations commenced for both Upper Marcellus wells in
A key component of the Company's strategy is increase recovery factors through completion optimization. With actual production in the Marcellus continuing to significantly outperform NSAI proved estimates1, the Company is gathering critical data that it expects will boost recoveries when reserves are reported for year-end 2015.
The Marcellus business unit continues to be a strong contributor in driving operational efficiencies, with drilling AFEs for the two Upper Marcellus wells coming in 5% under budget. The Company sees an opportunity to reduce
California Business Unit Operations
Warren's operations in the Wilmington Field of
The strength of Warren's oil production in the second quarter of 2015 reflects the success of operational efficiency efforts while maintaining well performance.
Wyoming Business Unit Operations
Warren will retain a 70% interest in the deep rights located below the Mesa Verde formation (68,700 gross acres / 39,000 net acres post transaction). The deep acreage is prospective for oil and gas bearing formations including the Sussex, Shannon,
Warren is encouraged by the announcement on
Commenting on the operational results to date, Interim CEO
Mr. Peterson continued: "Warren's mission is to create long term value for shareholders through best-in-class assets, operations and people. With the results we've been able to achieve in a very challenging commodity market environment, I believe there is a great deal of opportunity for growth in our future."
Portions of this press release contain 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. A number of factors may cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. Warren believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. Some factors that could cause actual results to differ materially from those in the forward-looking statements, include, but are not limited to: changes in oil and gas prices and hedging activities undertaken in relation thereto; changes in expected levels of oil and gas reserve estimates and production estimates; the inability to drill wells on a substantial portion of our acreage due to insufficient capital, market conditions or other factors; the timing and results of drilling and other development activities; any inability to hold substantial leases; governmental and environmental regulations and permitting requirements and delays; the availability of capital and credit market conditions; unsuccessful exploratory activities; unexpected cost increases; delays in completing production, treatment and transportation facilities; the availability and cost of obtaining equipment and technical personnel; operating hazards; risks associated with the availability of acceptable transportation arrangements; unanticipated operational problems; potential liability for remedial actions under existing or future environmental regulations; changes in tax, environmental and other laws applicable to our business as well as general domestic and international economic and political conditions; concentration of customers; inability to replace reserves as they are produced; climate change; computer security breaches; and factors that may affect our common stock including the numbers of shares subject to registration rights; stock price volatility; anti-takeover measures in our organizational documents; and any failure to make appropriate assumptions or estimates in the preparation of our financial statements or to maintain adequate internal control over financial reporting. All forward-looking statements are made only as of the date hereof and, unless legally required, the Company undertakes no obligation to update any such statements, whether as a result of new information, future events or otherwise. Further information on risks and uncertainties that may affect Warren's operations and financial performance, and the forward-looking statements made herein, is available in the Company's filings with the Securities and Exchange Commission (www.sec.gov), including its Annual Report on Form 10-K under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other public filings and press releases.
1Based upon the Company's year-end 2014 reserve report prepared by
2 ITG presentation: "DUG East 2015: Optimizing the Marcellus, June, 2015"