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BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc.

Warren Resources Inc. · Jan 14, 2014 · 50 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 1
    11th Annual Unconventional Resource Conference January 14, 2014
  2. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 2
    1. Company Overview Investing in the Future of Energy NASDAQ (WRES) 3
  3. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 3
    Senior Management Team Joined Warren Resources in December 2012 as Chairman and CEO Over 25 years of significant experience in the oil and natural gas industry Philip A. Epstein Chairman & CEO In 1992, participated in the founding…
  4. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 4
    Company Overview High quality, long-lived asset portfolio comprised Financial Profile as of Sep. 30, 2013 of two core operating areas Ticker: NASDAQ: WRES California Properties Market Capitalization: 212 MM Enterprise Value: 308.5…
  5. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 5
    Company History Since initial public offering in 2004, Warren has focused on developing its highest return projects with highest potential return Shifted production focus to match commodity favored environment Recent additions to…
  6. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 6
    Key Considerations High quality asset base with geographic and commodity diversification Existing infrastructure in core areas supports future development Balanced Portfolio Ability to allocate capital to higher return projects across…
  7. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 7
    Areas of Operations California Properties Wyoming Properties Located in the Wilmington Field in Located in southeast portion of the Los Angeles Basin Greater Green River Basin Third largest U.S. oilfield Commercial CBM Wilmington…
  8. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 8
    Balanced Asset Portfolio with Unbooked Upside Asset Summary Oil Reserves Estimated Proved reserves of 31.8 MMBoe as of 50 28 September 30, 2013 40 48% oil, 63% proved developed 30 (MMBbl) PV-10 of 500 million 20 15 Proved…
  9. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 9
    Strong Production Growth Through Cycles A track record of production growth while lowering costs Proved Reserves (Bcfe) Historical Production (MBOE) Historical Cost Structure* (/BOE net) 2,500 2,500 349 356 25.00 2,000 327…
  10. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 10
    Recent Achievements Goal Result Increased oil production in 2013 by 8% quarter over quarter (QTR 4 of 2012) Improved reservoir pressure maintenance reducing production decline Execute in Commenced field development at NWU following…
  11. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 11
    Business Strategy Increase Production from Existing Low-Cost Proved Inventory Near-term capital efforts on multiple California oil properties Develop large inventory of targeted, higher return wells in Wyoming while maintaining…
  12. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 12
    2. Operations Overview Investing in the Future of Energy NASDAQ (WRES) 13
  13. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 13
    California Operations Investing in the Future of Energy NASDAQ (WRES) 14
  14. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 14
    California: Wilmington Oil Field Overview Los Angeles Basin Third largest U.S. oilfield Produced over 2.5 billion barrels of oil since discovery in the 1930s Warren represents 10% of current production of the Wilmington field…
  15. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 15
    California: Wilmington Field Overview Wilmington Townlot Unit (WTU) Beverly Hills Salt Lake Los Angeles Unitized oilfield located in the Wilmington Field Chevice Hills Montebello Operated by Warren with a 99% WI / 81% NRI…
  16. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 16
    California: Operations Overview Apply risk management concepts (to significantly reduce the probability of major business losses) Focus: model of urban development Major milestones achieved: SW Ranger AOR approval, Ford waterflood…
  17. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 17
    California: Wilmington Townlot Unit Investing in the Future of Energy NASDAQ (WRES) 18
  18. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 18
    NWU Satellite 7 Drill Site Investing in the Future of Energy NASDAQ (WRES) 19
  19. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 19
    Existing WTU Cellar WTU Centralized Drilling and Production Cellars Warrens drilling cellars received the IOGCC 2011 Environmental Stewardship Award for independent oil companies. Investing in the Future of Energy NASDAQ (WRES)…
  20. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 20
    California: Development Strategy Continue horizontal / sinusoidal Producing Zones redevelopment SW Tar NE Drill highly targeted wells in 14 layers of Ranger stacked pay (2,600 - 6,000) Terminal - 3000' Target IRR per well of 40%…
  21. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 21
    California Oil: Operating Strategy Oil Production Growth 8% annual growth rate quarter over quarter (QTR 4 2012) Currently among highest daily oil production in Company history Target Rates of Return per well of 40-100% 85 CMS…
  22. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 22
    California: Tar Economics Illustrative Economics (1) IRR 77 NYMEX = 100%+ California Midway Sunset Oil Price (/Bbl) 85 NYMEX Price Required for 10% ROR 45 Sales Adjustment (4) Realized Price (Boe) 81 LOE, Gathering & Transportation…
  23. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 23
    California: Ranger / Upper Terminal Economics Illustrative Economics (1) IRR 77 NYMEX = 59% California Midway Sunset Oil Price (/Bbl) 85 NYMEX Price Required for 10% ROR 50 Sales Adjustment (4) Realized Price (Boe) 81 LOE, Gathering…
  24. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 24
    California Oil: Leroy Pine Project Acquired 62.5% working interest in Leroy Pine Reactivation Project in August 2013 Located in the Santa Maria Valley Oil Basin in Santa Barbara County, CA Unocal drilled 24 wells that produced a…
  25. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 25
    Rockies Operations Investing in the Future of Energy NASDAQ (WRES) 26
  26. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 26
    Wyoming: Greater Green River Basin Overview Williston Approved as operator in the Atlantic Rim in May 2013 Washakie Basin is located in the Big Powder southeast portion of the Greater Green Horn River River Basin in southwestern…
  27. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 27
    Atlantic Rim: Midstream Assets Pipeline Map Investing in the Future of Energy NASDAQ (WRES) 28
  28. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 28
    Wyoming: Economics Atlantic Rim Project Comprises 111,000 gross (86,000 net) acres on the Doty Mountain eastern rim of the Greater Green River Basin Estimated Proved reserves: 98.9 Bcf (September 30, 2013) Catalina Unit 150…
  29. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 29
    Rockies Operations: Atlantic Rim CBM Type Log Lewis Shale Top of Mesa Verde Late Cretaceous aged coals Three coal bearing sections Almond Section Multiple thin coal seams surrounded by highly porous water bearing sandstones…
  30. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 30
    CBM Well Economics Operational Goals Illustrative Type Curve (1.0 Bcf) Focus capital on wells with highest potential 500 EUR (gross): 0.8 - 1.16 Bcf returns 400 400 targeted drilling locations 300 Mcf/d 25 wells per year to…
  31. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 31
    Wyoming: Rockies Producing Zones Atlantic Rim Zones Owns certain deep rights in a portion of the Atlantic Rim area CBM current Warren production 71,000 net acres potentially prospective for oil bearing formations including:…
  32. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 32
    Atlantic Rim Deep Potential Investing in the Future of Energy NASDAQ (WRES) 33
  33. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 33
    Atlantic Rim Deep Potential Investing in the Future of Energy NASDAQ (WRES) 34
  34. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 34
    Rockies Operations: Goals Meet unit drilling obligations of 25 new CBM wells per year to hold large acreage position Define substantial resource base through high-graded geology and developmental drilling Maximize infrastructure…
  35. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 35
    3. Financial Overview Investing in the Future of Energy NASDAQ (WRES) 36
  36. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 36
    Financial Policy Capital spending dictated by internal rates of return across all operating areas Maintain financial flexibility Supplement organic development with accretive acquisitions Retain flexibility and liquidity to pursue…
  37. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 37
    Capitalization Available liquidity Pro Forma Capitalization As of 9/30/13 Ability to be (US millions, except per unit amounts) Cash & Equivalents 10.1 opportunistic with Long-Term Debt acquisitions that meet Revolving Credit…
  38. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 38
    2013 Capital Expenditures 2013 estimated capital expenditures of 2013 Capex by Area 73 Million 73 million 26 well California 2013 drilling program Wyoming 28% Drilled 13 new producing wells and 3 73 injector wells in WTU MM…
  39. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 39
    Existing Hedges Oil Hedges Volume Natural Gas Hedges Volume 2,000 16,000 Swaps Swaps 1,500 12,000 (MMBtu/d) (Bbl/d) 1,000 8,000 1,500 1,500 12,000 9,000 500 4,000 3,000 - - Q4 2013 2014 Q4 2013 2014 2015…
  40. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 40
    Summary Historical Financial Results Production Revenue 2,500 150 Natural Gas Oil 2,172 128 2,028 122 2,000 120 1,744 1,748 103 1,600 45% 50% 88 1,500 90 (MBoe) (MM) 44% 48% 40% 63 1,000 60 55% 50% 500 60% 56% 52%…
  41. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 41
    6. Appendix Investing in the Future of Energy NASDAQ (WRES) 42
  42. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 42
    Appendix- EBITDA Reconciliation 12 Months Ending Year Ended Year Ended Year Ended Year Ended September 30, 2013 December 31, 2012 December 31, 2011 December 31, 2010 December 31, 2009 (in millions) (in millions) (in millions) (in…
  43. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 43
    A. Management and Board of Directors Bios Investing in the Future of Energy NASDAQ (WRES) 44
  44. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 44
    Warren Resources Senior Management Philip A. Epstein was elected Chief Executive Officer and Chairman of the Board of Directors in December 2012. Mr. Epstein has over 20 years of experience as a senior executive in the global oil and…
  45. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 45
    Warren Resources Management (cont.) Robert Bob Dentici is Warren E&Ps Operations Manager for California operations. Mr. Dentici joined Warren E&P in 2007 and has 30 years of operations management, project management and facilities…
  46. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 46
    Warren Resources Senior Management (cont.) Ellis G. Vickers became Warrens Senior Vice President Land Management & Regulatory Affairs in January 2003. From September 2001 through December 2002, he was Vice President and Associate…
  47. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 47
    Warren Resources Board of Directors Philip A. Epstein was elected Chief Executive Officer and Chairman of the Board of Directors in December 2012. Mr. Epstein has over 20 years of experience as a senior executive in the global oil and…
  48. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 48
    Warren Resources Board of Directors (cont.) Anthony L. Coelho has been an independent director since May 2001 and serves on the Compensation Committee, which he chairs, and the Corporate Governance Committee of the Board. From 1998…
  49. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 49
    Warren Resources Board of Directors (cont.) Espy P. Price had been an independent director since May 2007 and served on the Compensation Committee. Mr. Price retired in late 1999 as Vice President and General Manager of Chevron's…
  50. BMO Capital Markets 11th Annual Unconventional Resource Conference – Warren Resources Inc. – slide 50
    Warren Resources, Inc. Please visit our new website: www.warrenresources.com Investing in the Future of Energy NASDAQ (WRES) 51

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