BMO Capital Markets Unconventional Resource Conference January 11, 2011
Reasons to Invest in Warren Resources, Inc. E&P Company with 80% of revenue from oil production Excellent track record of growth in production and cash flow 59% compounded annual growth rate in oil production over past 6 years…
Areas of Operations Warren WarrenResources, Resources,Inc. Inc. Proved Reserves as of 12/31/09: Proved Reserves as of 9/30/09: 10.8 MMBO 137 BCFE and 71 BCF Daily Production Average (6/30/09):(Q3 Net Production 26 MMCFE…
Operations Overview 22.6 MMBOE of Net Proved Reserves with a PV-10 of 443 million at December 31, 2009 using year-end 2009 pricing of 72.42 oil and 5.78 gas 10.8 MMBO net proved oil reserves account for only 2% of estimated 565 MMBO of…
Execution 2010 Year-to-Date Record production 1.3 million BOE first nine-months On track to meet high-end full year guidance Strong current realized prices: 79 per Barrel of oil Over 75% of revenue from oil 66 million of oil and…
Business Strategy Exploit existing properties through the drill bit Continue drilling additional Tar horizontal oil wells and Upper Terminal sinusoidal proof- of-concept horizontal wells in the J and Hx oil sands in Wilmington field…
Experienced Operating Team Years Operating Name Title Experience Regional Focus Area of Expertise Norman Swanton President, Chairman and Chief 40 Corporate Executive Executive Officer Tim Larkin Executive Vice President and Chief…
Focused Operations - Wilmington Oil Field
Wilmington Oil Field, California Overview History Third largest oil field in the United States, having produced over 3.0 billion barrels of oil from 9.0 billion barrels OOIP Approximately 300 MMBO of estimated oil reserves have…
Wilmington Ownership and Status Wilmington Townlot Unit (WTU) North Wilmington Unit (NWU) 98.90% WI, 80.99% NRI 100% WI, 84.61% NRI Unitized for water flood in 1972 by Exxon Unitized for water flood in 1977 by Sunoco 1,440 acres…
Wilmington Historical Production Warren California Oil Production 4,000 50,000 Oil Mid-tech: Tar well Water drilling with MWD 45,000 3,500 and 2-D Petra software 40,000 3,000 35,000 Water bpd 2,500 Oil bpd 30,000…
Geology - Producing Zones and Geometries SW Tar NE Ranger Terminal - 3000' Union Pacific Ford - 6000' Schist Productive Productive Limits Limits Basement - 9000' One OneMile Mile 13
Wilmington Oil Field, Los Angeles Basin Tar Formation Wells Illustrative Drilling Illustrative Economics (1) and Completion Costs (1) BOE EUR (gross in 000s) 148 NYMEX Oil Price 80 NRI 81% Sales adjustment 10% EUR (net in 000s) 121…
Upper Terminal - Producing Reservoirs 15
MODEL FOR ENVIRONMENTALLY SOUND OPERATIONS WTU CENTRALIZED DRILLING AND PRODUCTION CELLARS 16
Drilling Technology Well Placement Utilizing State-of-the-Art LWD Technology Azimuthal Deep Resistivity High Highdeviated deviatedwell wellconditions conditions Optimal OptimalWell WellBore BorePlacement Placement Risk…
Accurate Well Placement: Warrens 4 Types Tar Type: Typical horizontal wells placed high in reservoir to avoid water below Ranger and Terminal Type: Sinusoidal wells in thick and thin sand bed packages to maximize exposure to pay…
Development Strategy WTU Redevelopments since 1937 Description Tar Historical BOPD Warren succeeded in redeveloping the Tar interval with targeted directional drilling, increasing production to 2,000 BOPD, equaling the primary…
Atlantic Rim CBM Field Operations
Atlantic Rim CBM Washakie Basin Eastern rim of the Washakie Basin, Wyoming Atlantic Rim Project comprising 125,885 gross (65,790 net acres) Development of acreage in preferential CBM drilling fairway through a 50/50 joint venture with…
Atlantic Rim CBM Type Curve TYPE Atlantic WELL Rim PROFILE Type Well Profile 10000 1000 100 10 1 0 24 48 72 96 120 144 168 192 216 240 Time (months) Gas Rate (Mcfd) Water Rate (Bpd) Estimated ultimate…
Sun Dog Federal Unit Daily Gas Production Sun Dog Daily Production SUN DOG DAILY PRODUCTION 25,000 140,000 20,000 120,000 100,000 15,000 MCFD 80,000 BWPD 10,000 60,000 40,000 5,000 20,000 0 0 Jan-03…
Doty Mountain Unit Daily Gas Production Doty Mountain Daily Production DOTY MTN DAILY PRODUCTION 16,000 70,000 14,000 60,000 12,000 50,000 10,000 40,000 BWPD MCFD 8,000 30,000 6,000 20,000 4,000 2,000…
Niobrara Oil Shale Potential Warren owns deep rights below its Atlantic Rim project which includes an approximate 80,000 net acre position that is potentially prospective for the Niobrara Shale. The acreage is located in the eastern…
Financial Overview
Historical Financial Performance ( in thousands) Nine Months Nine Months Ended Sept. 30, Ended Sept. 30, Year Ended 2010 2009 2009 2008 Production: Natural gas (MMcf) 3,484 2,865 3,885 2,930 Oil (MBbls) 729 716 953 1,011 Total…
Existing Hedges Price per Date Product Type Contract Period Volume Mcf or Bbl Entered Into Natural Gas Swap 02/01/09 - 12/31/10 3,000 Mcf/d 6.88 Jan-09 Natural Gas Swap 03/01/09 - 02/28/11 3,000 Mcf/d 6.02 Feb-09 Crude Oil…
Peer Valuations Enterprise Value per Proved Developed BOE 500.00 / Proved Developed BOE 463.74 450.00 400.00 350.00 300.00 250.00 225.00 200.00 140.22 142.56 150.00 100.00 48.72 32.82 35.10 41.58 50.00 18.54 22.74 23.10…
Warrens Development Strategy Summary World Class Assets: stacked pay in 16 oil reservoirs on two 100% W.I. Unitized leases within the 3rd largest oilfield in the U.S. with significant EOR potential combined with huge CBM play in…
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