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EnerComs 2011 Oil Gas Conference – Warren Resources Inc.

Warren Resources Inc. · Aug 14, 2011 · 44 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. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 1
    Corporate Presentation August 2011
  2. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 2
    August 2011 Corporate Presentation Reasons to Invest Oil-weighted producer: 75% by revenue 32% CAGR 5-year oil production growth rate High Potential Oil Assets in 3 U.S. Field 10 mmbo proved; 30-40 mmbo reserve potential 200+…
  3. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 3
    August 2011 Corporate Presentation Business Strategy Drill-Bit Production & Reserves Growth 8+ year oil drilling inventory Develop 30-40 mmbo reserve potential in California 20+ year gas drilling inventory in Wyoming Fund…
  4. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 4
    August 2011 Corporate Presentation Project Development Process Raw Data Quality Control Process Modeling 1500 Wells Modernization Geological Modeling Petrophysical Evaluation Geostatistical Evaluation Interpretation Internal Peer…
  5. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 5
    August 2011 Corporate Presentation 2011 Year to Date Review 2011 Capital Budget: 70 million California Midway Sunset Oil Trades at 4% premium to WTI 17% WY 1st Half 2011 production (12MM) 836,000 boe 83% CA Full year guidance…
  6. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 6
    August 2011 Corporate Presentation WTI-CMS Historical Prices WTI-CMS Historical Prices 120 CMS* WTI 115 110 Price per Bbl (Rolling 30 Day Average) 105 California oil 100 WTI oil 95 90 85 80 75 70 1/20/11…
  7. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 7
    August 2011 Corporate Presentation Areas of Operations Warren Resources, Inc. CASPER NEW Proved Reserves as of 12/31/10: YORK 21.6 BOE LONG BEACH Current Average Net Production: 4,700 BOEPD Reserves Offices Areas of…
  8. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 8
    August 2011 Corporate Presentation Operations Performance: 2005-2011 Historical Production (MBOE) Historical Lease Operating Expenses (/BOE) Proved Reserves (Bcfe) 1,800 2,000 356 25.00 349 327 1,753 22.32 22.20 1,750 1,800…
  9. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 9
    August 2011 Corporate Presentation Asset Overview California Assets are Operated Wyoming Assets are JV-operated by Anadarko As of December 31, 2010 Area Total Net Proved Net Producing Total Drilling Reserves (Mmboe) Wells…
  10. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 10
    August 2011 Corporate Presentation California: Wilmington Townlot Unit NASDAQ: WRES 10
  11. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 11
    August 2011 Corporate Presentation California Oil: Environmentally Friendly WTU CENTRALIZED DRILLING AND PRODUCTION CELLARS NASDAQ: WRES 11
  12. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 12
    August 2011 Corporate Presentation California: Wilmington Oil Field Overview Los Angeles Warren Property Highlights Within the 3rd largest U.S. oilfield Shallow waterfloods in the Tar, Ranger and Upper Terminal formations…
  13. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 13
    August 2011 Corporate Presentation California Oil: Wilmington Field Producing Zones SW Tar NE Ranger Terminal - 3000' Union Pacific Ford - 6000' Schist Productive Limits Basement - 9000' One Mile NASDAQ: WRES 13
  14. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 14
    August 2011 Corporate Presentation California: Oil Operating Strategy Oil Production Growth 30-50% CAGR growth delivered historically Target Rates of Return per well of 50-80% 80 WTI oil price deck use for planning Use modern…
  15. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 15
    August 2011 Corporate Presentation California: Oil Operations Summary Wilmington Townlot Unit (WTU) North Wilmington Unit (NWU) 99% WI, 81% NRI 100% WI, 85% NRI Unitized for water flood in 1972 Unitized for water flood in 1977 by…
  16. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 16
    August 2011 Corporate Presentation California: Recent Oil Production Warren California Oil Oil Production Warren California Oil Production 4,000 Oil 3,500 3,000 2,500 Oil bpd 2,000 1,500 1,000 500 0…
  17. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 17
    August 2011 Corporate Presentation California: Development Strategy Continue horizontal / sinusoidal redevelopment plans Follows 3 vertical developments since the 1930s Drill Highly Targeted Horizontal Wells in 14 layers of…
  18. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 18
    August 2011 Corporate Presentation California Oil Development WTU Redevelopments since 1937 Tar Historical BOPD Description 37 horizontal wells drilled, 27 pending Warren succeeded in redeveloping the Tar interval with targeted…
  19. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 19
    August 2011 Corporate Presentation California Oil: Reservoir Modeling and Drilling Technology Well Placement Utilizing State-of-the-Art LWD Technology NASDAQ: WRES 19
  20. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 20
    August 2011 Corporate Presentation California Oil: Tar Reservoir Tar Reservoir Horizontal Development Cross-section showing saturations in NW area of Tar NASDAQ: WRES 20
  21. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 21
    August 2011 Corporate Presentation California Oil: Tar Reservoir Tar Reservoir Horizontal Development Cross-section showing saturations in NW area of Tar NASDAQ: WRES 21
  22. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 22
    August 2011 Corporate Presentation Highly Targeted Wells Petrel Saturation Cross-Section Well 2168 Actual Well Path Beginning of productive interval near fault 215 bopd 30 day IP Highest Tar well on structure and best…
  23. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 23
    August 2011 Corporate Presentation California Oil: Tar Type Well Illustrative Economics (1) IRR 80 NYMEX = 100+% NYMEX Oil Price 80 NYMEX Price Required for 45 10% ROR Sales adjustment 10% Realized Price (/Boe) 72 LOE,…
  24. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 24
    August 2011 Corporate Presentation California Oil: NWU Ranger Reservoir NASDAQ: WRES 24
  25. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 25
    August 2011 Corporate Presentation Targeted Sinusoidal Drilling Actual NWU Ranger well path shown Shale Sand Well path 180 amplitude Sinusoidal well shown above NASDAQ: WRES 25
  26. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 26
    August 2011 Corporate Presentation Wyoming Oil & Gas: Assets NASDAQ: WRES 26
  27. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 27
    August 2011 Corporate Presentation Wyoming: Atlantic Rim CBM Gas Warren Property Highlights Spyglass Hill Mega Unit: 113,000 gross acres held by production 25-well per year Unit drilling commitment for 10 years Spyglass…
  28. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 28
    August 2011 Corporate Presentation Atlantic Rim Producing Zones Atlantic Rim Spyglass Hill Mega Unit W Mesaverde Outcrop E - 2,000' - 6,000' - 10,000' CBM Down Dip Productive Limits Ten Miles NASDAQ: WRES 28
  29. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 29
    August 2011 Corporate Presentation Wyoming: Atlantic CBM Type Well Illustrative Economics IRR 4.45 NYMEX = 15% NYMEX Gas Price 4.45 NYMEX Price Required for 4.25 10% ROR Sales adjustment 0.30 Realized Price (/Mcf) 4.15 LOE,…
  30. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 30
    August 2011 Corporate Presentation Wyoming: Recent Gas Production Warren Production NASDAQ: WRES 30
  31. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 31
    August 2011 Corporate Presentation Wyoming CBM Strategy Gas: Optimize cash flow from Anadarko- Warren Joint Venture CBM asset at low current gas prices Drill required 25 CBM wells per year to hold Mega-unit Optimize frac work…
  32. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 32
    August 2011 Corporate Presentation Wyoming Niobrara Strategy Define Niobrara oil strategy by late 2011 Complete Atlantic Rim Area regional Niobrara exploration study in 2011 Rank prospective Niobrara focus areas within 80,000…
  33. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 33
    August 2011 Corporate Presentation 2011 Milestones: What to Watch WTU AQMD permits received July 20, 2011 after 3 year process Increases oil processing capability to 5000 bopd 1st California DOGGR injection well permit received…
  34. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 34
    August 2011 Corporate Presentation: Financial Highlights NASDAQ: WRES 34
  35. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 35
    August 2011 Corporate Presentation Historical Financial Performance 6 Months Ended Year Ended Year Ended Year Ended June 30, 2011 Dec.31 2010 2009 2008 Total production (MBOE) 836 1,744 1,600 1,499 Adjusted EBITDAX 23,600…
  36. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 36
    August 2011 Corporate Presentation Operations Performance: 2005-2011 Historical Production (MBOE) Historical Lease Operating Expenses (/BOE) Proved Reserves (Bcfe) 1,800 25.00 2,000 356 349 22.32 22.20 1,750 1,800 327 1,753…
  37. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 37
    August 2011 Corporate Presentation Peer Valuations Enterprise Value per Proved Developed BOE 300.00 264.38 250.00 200.00 144.58 150.00 127.31 100.00 51.19 50.00 35.78 38.12 40.53 31.87 21.61 21.78 0.00 WRES RAM…
  38. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 38
    August 2011 Corporate Presentation Peer Analysis: 2-Year F&D 100% /BOE 19.74 75% 50% 9.30 25% Warren Resources Peer Group Average Source: EnerCom, Inc. Five Factor Model * Costs incurred divided by the sum of…
  39. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 39
    August 2011 Corporate Presentation Peer Analysis: TTM OPEX/G&A 100% /BOE 75% 25.68 25.38 50% 25% Warren Resources Peer Group Average Source: EnerCom, Inc. Five Factor Model * (OPEX + G&A) divided by production…
  40. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 40
    August 2011 Corporate Presentation Peer Analysis: TTM Capital Efficiency 100% 274% 75% 50% 206% 25% Warren Resources Peer Group Average Source: EnerCom, Inc. Five Factor Model * (TTM EBITDA divided by TTM…
  41. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 41
    August 2011 Corporate Presentation Peer Analysis: Debt / Total Cap 120% 100% 100% 80% 60% 75% 40% 39% 30% 50% 20% 25% 0% Warren Resources Peer Group Average Source: EnerCom NASDAQ: WRES 41
  42. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 42
    August 2011 Corporate Presentation Debt / Total Cap 60% 50% 47% 40% 39% 29% 30% 20% 10% 0% 12/31/2008 12/31/2009 12/31/2010 Source: EnerCom, Inc. NASDAQ: WRES 42
  43. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 43
    August 2011 Corporate Presentation Debt-Adjusted Production Growth Per Share 150% 98% 100% 53% 50% 42% 40% 0% -1% -9% -10% -19% -50% -52% -54% -75% -100% -150% -200% -250% -244% -300% A B WRES C D E F G H I J…
  44. EnerComs 2011 Oil Gas Conference – Warren Resources Inc. – slide 44
    August 2011 Corporate Presentation: Closing Remarks Strong Assets & Significant Accomplishments World Class Assets 30-40 mmbo oil potential California 500-600 bcf gas potential in Wyoming Strong Growth Track Record 32% CAGR…

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