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GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc.

Warren Resources Inc. · Jun 23, 2015 · 34 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. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 1
    Tunkhannock, Pennsylvania Wilmington Field, California A More Focused, Stronger Company Poised to Hit Targets And Return to Growth Atlantic Rim, Wyoming GHS 100 Conference Chicago June 23, 2015
  2. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 2
    A Focused Business Strategy 1. Right-size Capital Spending 2. Optimize Current Assets and Protect Production Against Commodity Risk 3. Increase Liquidity 4. Position for Commodity Price Recovery 5. Pursue Selective Growth…
  3. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 3
    Focus & Intensity Driving Results 1. Right-size Spending Warren Announced Plan Execution & Results Revised CAPEX includes Cut 2015 CAPEX budget from reduction of 59 million initial 2015 plan to preserve from original 2015…
  4. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 4
    Focus & Intensity Driving Results 2. Optimize Current Assets and Protect Production Against Commodity Risk Warren Announced Plan Execution & Results LOE savings of approximately 1.2 MM in Q1. Days to to drill in Marcellus Target…
  5. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 5
    Focus & Intensity Driving Results 3. Increase Liquidity Warren Announced Plan Execution & Results New first lien credit facility with GSO/Franklin Square replaces bank Add liquidity through secured debt group, retires 22.4 mm of…
  6. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 6
    Focus & Intensity Driving Results 4. Position for Commodity Price Recovery Warren Announced Plan Execution & Results Develop multi-phase plan to re-start Team in place to execute in an efficient development with future commodity…
  7. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 7
    Recent Major Milestones: GSO/Franklin Square Deal May 2015 Terms: Strategic refinancing with Franklin Square Funds Sub-Advised by GSO Capital Partners LP 250 mm first lien credit facility closed May 22, 2015 202.5 mm of new money…
  8. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 8
    Wyoming CBM Divestiture Creates Significant Additional Liquidity Terms: On June 16 Warren Resources announced it had entered into agreements to divest its CBM and midstream pipeline assets in the Atlantic Rim to Escalera Resources…
  9. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 9
    Warren Repositioning After Wyoming Sale Marcellus Properties 5,289 net acres in Northeast PA 75% working interest California Properties WY PA Core-of-the-core Marcellus Wilmington Field in the Los Angeles Basin 100% HBP or held by…
  10. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 10
    Pro Forma Capitalization Post GSO/Franklin Square & Wyoming Transactions As of May 22, 2015 Pro Forma Adjustment Pro Forma (GSO-Franklin Square) (upon WY sale closing) Cash 14 -- 14 Long Term Debt Credit Facility(1) 172.5…
  11. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 11
    2015 Guidance1 2015 Capex Budget (MM) 2015 Production Guidance Full Year ending December 31, 2015 WTU 3 Oil (MBbl) 900 1,000 NWU Gas (MMcf) 28,000 30,000 Marcellus 13 5 Total - Oil Equivalent (Mboe) 5,567 6,000 Total - Gas…
  12. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 12
    Marcellus Operations Investing in the Future of Energy NASDAQ (WRES) 13
  13. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 13
    Operational Efficiency Targets Key Points Marcellus Drilling Performance Days vs. Depth Drilling Days Continually capturing operational efficiencies 0 5 10 15 20 25 30 35 while remaining focused on additional tangible 0…
  14. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 14
    2015 Marcellus Operational Plan Key Points 2015 Development: Upper Marcellus GIP Map 2015 Capex: 13 million Drilling Plan Selected two high quality locations to test Upper Marcellus Both locations drilled and pipe cemented…
  15. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 15
    Field Infrastructure and Marketing Key Points Pipeline and Gathering System Map Operational infrastructure system in place to support full field development All volumes gathered by Energy Transfer Partners (formerly Regency) 2…
  16. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 16
    Upside in the Marcellus 3 Ways to Win Upside Initiatives Resource Potential Upside(1) 600 1. Increase EURs booked in proved reserves by proving-up greater 500 recovery factor of OGIP 400 200 Bcf of Natural Gas 2. Prove…
  17. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 17
    Proving-up greater recovery factor of OGIP Key Points Example of Marcellus Production Performance Actual production continues to Proved - 50% RF POSS - 65% RF Actual Production outperform NSAI proved 100,000 estimates Decline from…
  18. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 18
    Upper Marcellus Potential Overview Upper Marcellus Opportunity to significantly increase reserves through targeting of the Upper Marcellus Cabot Oil & Gas, an offset operator to Warren, has reported highly encouraging…
  19. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 19
    Northeast Takeaway Expansion Projects 6 PennEast: 1 Bcf/d 5 Atlantic Sunrise: 1.7 Bcf/d DTI Iroquois (NIMO East): 0.3 Bcf/d 4 Algonquin AIM: 0.3 Bcf/d Takeaway (Bcf/d) Constitution Pipeline: 0.7 Bcf/d 3 Transco Leidy…
  20. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 20
    California Operations Investing in the Future of Energy NASDAQ (WRES) 21
  21. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 21
    California: Wilmington Field Overview Wilmington Townlot Unit (WTU) Beverly Hills Salt Lake Los Angeles Operated by Warren with 99% WI / 81% Chevice Hills Montebello Bandin NRI Englewood Brea-Olenda Sante Fe Springs 1,440…
  22. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 22
    California: Wilmington Development Horizontal / sinusoidal development Producing Zones SW Tar NE Ranger Drill highly targeted wells in 5 Terminal Union Pacific - 3000' stacked pay zones from 2,600 to Ford/237 - 6000' 6,000…
  23. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 23
    Wilmington Operational Efficiency Targets Key Points Wilmington Drilling Performance Team has been very successful in Days vs. Depth WTU Days vs. Depth WTU Tar Days vs. Depth NWU capturing efficiency gains during Ranger Ranger…
  24. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 24
    Wyoming Operations Investing in the Future of Energy NASDAQ (WRES) 25
  25. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 25
    Wyoming Deep Potential: Producing Zones Atlantic Rim Zones Warren will retain 70% of pre-existing deep rights upon expected closing of Escalera sale CBM current Warren CBMproduction current 39,000 net acres in the Atlantic Rim…
  26. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 26
    5. Financial Overview Investing in the Future of Energy NASDAQ (WRES) 27
  27. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 27
    Historical Financial Results Production (MMcfe/d) Revenue (MM) Oil Production (MMcfe/d) Gas Production (MMcfe/d) 160.0 150 80 129 122 62.5 120.0 60 103 45% 48% 88 40% 44% 48% 33.3 35.2 80.0 40 44.1 63 26.3 28.7 28.7 15.1…
  28. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 28
    Financial Hedges Oil Hedges(1) Natural Gas Hedges(1) 2,000 60,000 50,000 1,500 40,000 1,000 30,000 20,000 500 10,000 0 0 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Derivatives Quantity(2) Period…
  29. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 29
    Sales Agreements - Marcellus 60 50 40 Volumes (MMcf/d) 30 20 10 0 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 P&G Contract NYMEX less 1.10/Mcf: 24.4 MMcf/d P&G Contract NYMEX plus 0.03/Mcf: 24.4 MMcf/d Physical…
  30. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 30
    2014 Reserve Summary Net Oil Net Gas Net Total PV-0 PV-10 Reserve Category (MMBbls) (Bcf) (Bcfe) (MM) (MM) PDP 8 153 204 574 396 PDNP 0 50 51 117 64 PUD 8 124 173 461 149 Total Proved 16 327 428 1,152 609 PROB 4 53 75 227 77 POSS…
  31. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 31
    Proved Reserves: YE 2014 Asset Summary Natural Gas Reserves 500 Estimated Proved Reserves of 428 Bcfe 375 76% gas, 60% proved developed (PDP/PDNP) Bcf 250 124.1 125 203.3 - Gas PDP/PDNP Gas PUD Estimated Proved…
  32. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 32
    Appendix Investing in the Future of Energy NASDAQ (WRES) 33
  33. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 33
    Non-GAAP Reconciliation: EBITDA Year Ended December 31, (M M ) 2011 2012 2013 2014 Net Income 21.6 15.5 30.4 24.0 Interest Expense 3.2 3.3 3.0 9.6 Income Taxes (0.1) - 0.1 (0.0) DD&A 30.5 47.2 44.8 56.5 EBITDA 55.2 66.0 78.3…
  34. GLOBAL HUNTER 100 CONFERENCE – Warren Resources Inc. – slide 34
    Non-GAAP Reconciliation: Year-end 2014 SEC PV-10 PV-10 Reconciliation1 December 31, 2014 (in 000s) Proved developed 395,682 Proved developed non-producing 64,377 Proved undeveloped 149,067 PV-10 Value 609,126 Less: future…

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