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|Warren Resources Announces 2005 Reserves and Production|
- Record proved reserves increase 215% - Record production increases 60%
NEW YORK, Jan. 26 /PRNewswire-FirstCall/ -- Warren Resources, Inc. (Nasdaq: WRES) today announced 2005 year-end net proved reserves were a record 326.8 billion cubic feet equivalent (Bcfe), a 215% increase over year-end 2004 reserves of 103.6 Bcfe.
The Company's current net proved reserve mix is 93% crude oil and 7% natural gas. In accordance with SEC guidelines, reserve estimates do not include any probable or possible reserves which may exist for Warren's non- proved properties, which represent approximately 90% of its acreage.
Warren's estimated present value of the net proved reserves, discounted at 10% per annum and before the impact of income taxes, or PV-10, at year-end was $637.9 million, an increase of 163% over 2004. Approximately 17% of total PV- 10 is categorized as proved developed producing and 83% are proved undeveloped. The 2005 PV-10 calculation used net year-end commodity prices of $49.05 per barrel of crude oil and $9.92 per Mcf of natural gas, compared to average realized prices of $37.59 per barrel of oil and $5.30 per Mcf of natural gas for year-end 2004. Reserve estimates for 2005 and 2004 were prepared by the Company's independent reserve engineering consultants, Williamson Petroleum Consultants, Inc.
During 2005, Warren produced 1,074 MMcf of natural gas and 148 thousand barrels of oil, or 1.96 Bcfe, a 60% increase over 2004 production. Primarily this increase resulted from the early 2005 acquisition of substantially all of the remaining working interests in the Wilmington Townlot unit oil field in California as well as growth through the drillbit. During the 4th quarter of 2005, Warren produced 284 MMcf of gas and 49 thousand barrels of oil, or 0.58 Bcfe, a 385% increase over 4th quarter production in 2004 and the highest quarterly production level in the history of the Company. Warren's production replacement rate, primarily through its acquisitions and active development drilling program, was 11,200% for the year ended 2005.
"The Company grew at a record pace in 2005" commented Norman F. Swanton, Warren Resources Chairman and CEO. "Warren's record reserve and production growth during 2005 demonstrates our commitment to deliver consistent value creation by executing our balanced exploration and development strategy and capturing key reserve acquisition opportunities at attractive prices." Added, Mr. Swanton, "We believe that our current 2006 capital and exploration budget of $108 million provides the necessary funding to continue our strong long- term production and reserve growth."
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. Statements regarding projections of revenues or income or reserves or similar items, such as statements pertaining to future revenues, future capital expenditures, future cash flows, future operations or results, and other statements that are not historical facts, are examples of forward looking statements. 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).
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.
SOURCE Warren Resources, Inc. -0- 01/26/2006 /CONTACT: David Fleming of Warren Resources, Inc., +1-212-697-9660 / /Web site: http://www.warrenresourcesinc.com / (WRES) CO: Warren Resources, Inc. ST: New York IN: OIL SU: BE -- NYTH031 -- 4627 01/26/2006 08:30 EST http://www.prnewswire.com