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|Warren Resources Calls for Full Redemption of Outstanding 13.02% Sinking Fund Convertible Bonds Due December 31, 2015|
NEW YORK, Sept 21, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Warren Resources, Inc. (Nasdaq: WRES) (the "Company") today announced that the Company has elected to fully redeem before maturity its 13.02% Sinking Fund Convertible Bonds due December 31, 2015 (the "Bonds"), at their regular redemption price of 100% of the principal amount thereof ($1,000.00 per $1,000.00) plus accrued interest to the redemption date of November 23, 2005 (the "Redemption Date"). All interest on Bonds called for redemption will cease to accrue on and after the Redemption Date of November 23, 2005.
The redemptions are being made under terms of the Bonds, which permit the Company to redeem them prior to maturity. Notice of redemption is being mailed to bondholders of record on or about September 21, 2005.
Mr. Timothy Larkin, Chief Financial Officer of the Company, noted that "by redeeming the Bonds, Warren will further reduce debt by $10.6 million, annual interest payments by $1.4 million and annual sinking fund requirements by $0.4 million. As a result of the redemption, U.S. Treasuries having a fair market value of $2.7 million being held in escrow by the Trustee to secure repayment of the Bonds will be released to the Company.
During 2005, Warren will have reduced debt by $40.2 million, from $46.5 million to $6.3 million. Additionally, the remaining $6.3 million of bonds outstanding after the redemption are fully secured at maturity by matching zero coupon U.S. Treasury securities having a fair market value of $4.0 million."
American Stock Transfer & Trust Company is the redemption Paying Agent and Trustee.
For Cash Redemption Payment: Payment of the Redemption Price on the Bonds called for redemption will be paid only upon presentation and surrender of the Bonds by Bondholders along with a letter of transmittal duly completed and electing cash redemption in the following manner:
By Mail or in Person to: American Stock Transfer and Trust Company 59 Maiden Lane New York, NY 10038 Attn: Reorg/Exchange Department
For Bondholders Electing to Convert to Common Stock: At any time prior to the close of business on the Redemption Date, bondholders may exercise their right to convert their Bonds into shares of the Company's common stock at the conversion rate of 125 shares of the Company's Common Stock per $1,000 principal amount at maturity ($8.00 per share). The Bonds may be converted any time prior to the Redemption Date by the bondholder surrendering the original Bond certificate to the Paying Agent/Trustee along with either (1) the conversion notice (located on the back of the certificate) duly completed and executed, or (2) a separate Bond Conversion Election Form contained in the Letter of Transmittal duly completed and executed.
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 Rocky Mountain region and its waterflood oil recovery program in the Wilmington Townlot Unit within the Los Angeles Basin of California. The Company is headquartered in New York, New York, and its exploration and development subsidiary has principal offices in Casper, Wyoming and Long Beach, California.
SOURCE Warren Resources, Inc.
Investor Relations Contact: Kathleen Heaney, +1-212-753-2137