Investing in the Future of Energy Investor Presentation September 2014
Company Overview Three core operating areas Financial Profile California Ticker: NASDAQ: WRES Primarily focused on waterflood oil recovery (US mm) and horizontal development in Wilmington field Market Capitalization as of 9/16/14 (1)…
Areas of Operations California Properties Marcellus Properties Wilmington Field in the Los Angeles 5,289 net acres in Northeast PA Basin 75% working interest 3rd largest U.S. oilfield PA WY Core-of-the-core Marcellus Waterflood…
Company History Philip Epstein appointed Chairman and CEO in December 2012 Recent additions to management and Board position Company for further growth Transformative Marcellus acquisition provides new core area in another world…
Marcellus Acquisition: Deal Overview Warren acquired assets in the Marcellus Basin from Citrus Energy Corporation (Citrus Energy or Citrus) and two additional working interest owners for 352.5 million 312.5 million in cash and 40…
Marcellus Acquisition: Key Takeaways Free cash flow generation from acquired assets Self-funded development Expected to allow for natural deleveraging Significant embedded upside potential Upper Marcellus Narrowing of…
Pro Forma and Combined Warren Resources as of March 31, 2014 Combined Proved Reserves(1) (Bcfe) LTM PF EBITDA(2,3) (MM) Oil Gas 139.5 407.3 82.4 202.5 310.9 106.0 96.4 96.4 Current Combined Current Pro Forma Combined…
Pro Forma Proved Reserves Asset Summary Natural Gas Reserves 500 Estimated Proved Reserves of 407 Bcfe(1) 375 76% gas, 59% proved developed (PDP/PDNP) Bcf 250 121.2 125 189.7 - Gas PDP/PDNP Gas PUD Estimated Proved…
Large Resource Potential Upside Oil Net Resource Potential Upside(1)(2) Natural Gas Net Resource Potential Upside(1)(2) +10.9 +200 +100 Bcf of Natural Gas MMBbls of Oil +350 16.1 310.8 Total Proved Oil Reserves…
Organic Growth: Turning Potential to Proved Strategies Resource Potential Upside(1) Marcellus 400 Drill Lower Marcellus locations offset to PDP wells to prove-up greater recovery factor of OGIP 350 Resource Potential Upside…
Enhancing Growth with Accretive Acquisitions Warren focuses on acquisitions which will complement and enhance the Companys current operations and strategy Typical characteristics Warren screens for in an acquisition candidate:…
California Operations Investing in the Future of Energy NASDAQ (WRES) 13
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…
California: Wilmington Field Overview Wilmington Townlot Unit (WTU) Beverly Hills Salt Lake Los Angeles Operated by Warren with 99% WI / 81% NRI Chevice Hills Montebello 1,440 gross (1,424 net) acres Englewood Bandin Produced…
California: Operations Overview Apply risk management concepts to significantly reduce the probability of major business losses Model of urban development Existing WTU Cellar Wilmington Townlot Unit Investing in the Future of…
California: Wilmington Development Strategy Continue horizontal / sinusoidal development Producing Zones Drill highly targeted wells in 5 stacked pay zones from 2,600 to 6,000 containing 14 reservoirs Projecting per well IRRs of…
Marcellus Operations Investing in the Future of Energy NASDAQ (WRES) 18
Marcellus Assets Overview Asset Summary Map of Operations & Offset Operators Concentrated acreage position in Wyoming County, PA Offset operators include Cabot, Southwestern, and Chesapeake Citrus drilled 7 of the top 25 wells in…
Core-of-the-Core Asset Core-of-the-Core Asset with Top-Tier Economics EURs by Company (Bcf/1,000' of Lateral Length) (1) Leading Marcellus breakevens 3.6 Average IRR exceeding 100% 2.6 2.4 Consistently strong well results,…
Established and Growing Infrastructure Key Points Pipeline and Gathering System Map Operational infrastructure system in place to support full field development All volumes gathered by Regency (formerly PVR) Two planned compressor…
Compelling Upside Potential Overview Upper Marcellus Opportunity to significantly increase reserves through targeting of the Upper Marcellus Cabot Oil & Gas, an offset operator to Citrus, has reported highly encouraging…
N.E. PA Differentials: Risk Mitigation Initiatives Initiatives expected to limit and reduce impact of N.E. PA differentials: Elevated differentials incorporated into analysis and valuation of the acquisition. Base Case NE PA realized…
Wyoming Operations Investing in the Future of Energy NASDAQ (WRES) 24
Wyoming: Atlantic Rim Operations Overview Atlantic Rim Project Commercial CBM production established by Warren in 2002, Anadarko operator through end of 2012 Warren approved as operator of the Spyglass Hill Unit in the Atlantic Rim…
Wyoming: Atlantic Rim - Sub-unit Detail Doty Mountain Area Summary as of June 30, 2014 Catalina Unit 2Q 2014 (ESCR operated) Avg. Net Proved Current Producing Production Reserves(1) Sun Dog Area Operator WI (%) Wells (MMcf/d)…
Wyoming Deep Potential: Producing Zones Atlantic Rim Zones Owns certain deep rights in a portion of the Atlantic Rim area CBM current 71,000 net acres potentially Warren CBM production current Warren production prospective for…
5. Financial Overview Investing in the Future of Energy NASDAQ (WRES) 28
Financial Strategy Capital spending dictated by rates of return across all operating areas IRR hurdle rate of 30% for drilling projects Complement organic development with accretive acquisitions Maintain financial flexibility…
Pro Forma Capitalization Commentary Pro Forma Capitalization Underlevered balance sheet prior to Actual As of June 30, 2014 Adjustments Pro Forma the acquisition Cash & Cash Equivalents (US mm) 1.8 1.8 Revolving Credit Facility…
Summary Historical Financial Results Production (MMcfe/d) Revenue (MM) Oil Production (MMcfe/d) Gas Production (MMcfe/d) 240.0 140 203 117.7 200.0 120 100 160.0 45% 48% 122 129 40% 44% 48% 80 120.0 103 99.3 88 60 33.3 35.2…
Strong Record of Reducing Expenses Warren management has a strong track record of improving efficiency, growing production while lowering costs G&A per Boe(1) LOE per Boe(2) 1. G&A includes non-cash stock based compensation…
Summary of Key Investment Highlights Balanced Portfolio with Commodity Optionality Attractive Reinvestment Profile Experienced Management With Large Upside Potential and Operations Team Strong Financial Position and…
Appendix Investing in the Future of Energy NASDAQ (WRES) 35
California: Wilmington Field Type Curves WTU Ford WTU Tar WTU Upper Terminal 60 Year Bbl/d Oil Decline 120 Year Bbl/d Oil Decline 120 Year Bbl/d Oil Decline 0 55 0 110 0 103 50 1 33 40% 100 1 54 51% 100 1 62 40% 2 24 27% 2 43 31% 2…
Northeast Marcellus Type Curve Commentary Northeast Marcellus Type Curve(1) Production from the 30 16,000 PDP wells currently Year Mcf/d Gas Decline 0 14,324.5 14,000 exceeding Lower 1 5,218.7 64% EUR (Gross): 11.7 Bcf…
Wyoming CBM: Type Curve Wyoming CBM Type Curve (1.0 Bcf) 500 450 EUR (Gross): 0.8 - 1.16 Bcf Natural Gas 400 Year Mcf/d 0 9 350 Mcf/d Natural Gas 1 324 300 2 476 3 397 250 4 324 200 150 100 50 0 0 1 2 3…
Non-GAAP Reconciliation: Year-end 2013 SEC PV-10 PV-10 Reconciliation1 For the Year Ended December 31, 2013 (in 000s) Proved developed 379,310 Proved undeveloped 124,396 PV-10 Value 503,706 Less: future income taxes, discounted…
Warren Resources, Inc. Please visit our new website: www.warrenresources.com Investing in the Future of Energy NASDAQ (WRES) 43
Loading...
