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2014 Annual Meeting of Stockholders – Warren Resources Inc.

Warren Resources Inc. · Jun 10, 2014 · 46 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. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 1
    Investing in the Future of Energy 2014 Annual Meeting of Stockholders June 10, 2014
  2. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 2
    Table of Contents 1. Company Overview......4 2. Operations...14 3. Financial Overview.31 4. Conclusion...35 5. Appendix...38 Investing in the Future of Energy NASDAQ (WRES) 3
  3. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 3
    1. Company Overview Investing in the Future of Energy NASDAQ (WRES) 4
  4. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 4
    Company Overview Financial Profile Asset Profile Ticker: NASDAQ: WRES Estimated proved reserves1: 33.7 MMBoe Share price3: 4.66 % Oil1: 48% Shares Outstanding2,4: 73.6 MM % Total PDP and PDNP1: 64% Market Capitalization: 343.2 MM…
  5. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 5
    Areas of Operations California Properties Wyoming Properties Wilmington Field in the Los Located in Washakie Basin Angeles Basin Commercial CBM development 3rd largest U.S. oilfield Waterflood oil recovery 2012 acquisition of…
  6. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 6
    Company History Warren Resources, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of domestic oil and natural gas reserves. The Companys activities are primarily focused on…
  7. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 7
    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 In 1992, participated in the founding of Belco Oil & Gas…
  8. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 8
    Business Strategy Optimize Operations on Current Assets Grow production from current low-risk, long-life assets Control operational and development costs; increase efficiencies Continuous technical analysis of data collected from…
  9. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 9
    Reserves Well Balanced Between Oil & Gas Asset Summary Oil Reserves* Estimated Proved Reserves of 33.7 MMBoe as of 18 16 December 31, 2013 14 12 48% oil, 64% proved developed (PDP/PDNP) MMBbls of Oil 10 8 Year-end 2013…
  10. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 10
    Strong Production Growth Through Cycles A track record of growing production while lowering costs Historical Annual Production* (MBOE) Historical Cost Structure** (/BOE net) * 2014E production reflects midpoint of FY14 production…
  11. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 11
    Large Inventory of Potential Drilling Locations Gross PUD Locations Wilmington Field, California: 68 gross PUD locations1 82 gross identified additional potential WY CBM WTU undeveloped locations1,2,3 49 42 In total represents…
  12. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 12
    2014: Capital Expenditure Budget 2014 Capex by Area 2014 Capital Expenditure Budget Wells Wyoming Operating Injectors/ Drill & Facilities Total 34% Area Producers Disposal Total Com plete & Infras. CapEx WTU 17 5 22 30.8 7.9…
  13. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 13
    2. Operations Investing in the Future of Energy NASDAQ (WRES) 14
  14. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 14
    California Operations Investing in the Future of Energy NASDAQ (WRES) 15
  15. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 15
    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…
  16. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 16
    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…
  17. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 17
    California: Wilmington Townlot Unit Investing in the Future of Energy NASDAQ (WRES) 18
  18. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 18
    California: 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…
  19. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 19
    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…
  20. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 20
    California: WTU Ford Formation Successfully tested in 2011 WTU Ford Type Curve Development commenced in Feb. 2014 60 o 2014 drilling plan of 8 producer wells and 2 Year Bbl/d Oil Decline injector wells 0 55 50 1 33 40% 2 24 27%…
  21. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 21
    California: Leroy Pine Project Acquired 62.5% working interest in Leroy Pine Reactivation Project in August 2013 Located in the Santa Maria Valley Oil Field in Santa Barbara County, CA Significant well control Unocal drilled 24…
  22. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 22
    Rockies Operations Investing in the Future of Energy NASDAQ (WRES) 23
  23. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 23
    Wyoming: Atlantic Rim Operations Overview Atlantic Rim Project Commercial CBM production established by Williston Warren in 2002, Anadarko operator through end of 2012 Warren Approved as operator of the Big Spyglass Hill Unit in…
  24. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 24
    Wyoming: Atlantic Rim - Sub-unit Detail Doty Mountain Area Summary as of March 31st, 2014 Catalina Unit 1Q 2014 (ESCR operated) Avg. Net Proved Current Producing Production Reserves* Sun Dog Area Operator WI (%) Wells (MMcf/d)…
  25. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 25
    Atlantic Rim: Midstream Assets Pipeline Map Warren owns 100% of the gathering line to CIG after acquiring Anadarkos 50% interest in Oct. 2012 Owning the gathering line has allowed Warren to lower its LOEs in the Atlantic Rim…
  26. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 26
    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…
  27. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 27
    Rockies: Washakie Basin Stratigraphic Column Lewis Shale Late Cretaceous aged coals Top of Mesa Verde Three coal bearing sections Almond Almond Section Pine Ridge Allen Ridge Pine Ridge Section Average net coal thickness is…
  28. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 28
    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 production prospective for oil bearing formations…
  29. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 29
    Wyoming Deep Potential: Regional Activity ** * *Southwestern Energy recently acquired Quicksilvers and SWEPI LPs (Royal Dutch Shell) 300,000 net acre position in the Sand Wash Basin ** Double Eagle changed its name to…
  30. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 30
    3. Financial Overview Investing in the Future of Energy NASDAQ (WRES) 31
  31. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 31
    Capitalization / Liquidity Current Capitalization & Liquidity As of (US millions, except per unit amounts) 3/31/14 Significant liquidity Cash & Equivalents Long-Term Debt 1.8 Ability to be opportunistic with Revolving Credit…
  32. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 32
    Hedges Oil Hedges* Natural Gas Hedges* 2,000 15,000 12,000 12,000 1,300 9,000 (MMBtu/d) (Bbl/d) 1,000 6,000 3,000 3,000 - - 2014 2014 2015 Derivatives Quantity Period Derivatives Quantity Period Oil…
  33. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 33
    Summary Historical Financial Results Production Revenue 2,143 140 129 Oil Natural Gas 2,028 122 2,000 120 1,744 1,748 103 1,600 100 88 1,500 45% 48% 80 40% 44% 48% 63 (MM) 1,000 60 40 500 60% 56% 52% 55% 52% 20 - 0…
  34. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 34
    4. Conclusion Investing in the Future of Energy NASDAQ (WRES) 35
  35. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 35
    Key Reasons to Own Warren Resources Focused management and experienced technical team New leadership focused on maximizing performance from current operations and while accelerating growth Extensive experience in horizontal drilling,…
  36. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 36
    Upcoming Potential Catalysts Catalyst Comments Production Growth: WTU Ford: 8 production wells and 2 water injectors planned in 2014; Warrens initial Ford tests in 2011 were positive and offset operator OXY had significant success…
  37. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 37
    5. Appendix Investing in the Future of Energy NASDAQ (WRES) 38
  38. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 38
    California: 2014 Development Plan Total capital expenditure budget of 77 million for California in 2014 82% allocated to drilling and completion activity Wilmington Townlot Unit Capital budget of 38.7 million 30.8 million drilling…
  39. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 39
    Wyoming CBM: 2014 Development Plan Total 39 million capital expenditure budget for Wyoming CBM in 2014 84% allocated to drilling and completion activity Wyoming CBM 2014 Wyoming CBM 2014 Capital budget of 38.9 million Capital…
  40. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 40
    California: Wilmington Field Type Curves WTU Tar WTU Upper Terminal 120 Year Bbl/d Oil Decline 120 Year Bbl/d Oil Decline 0 110 0 103 100 1 54 51% 100 1 62 40% 2 43 31% 2 36 33% 80 80 3 32 26% Bbl/d Oil 3 27 25% 4 25 22%…
  41. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 41
    Drilling Inventory: Total Gross Potential Locations Area of Operation Gross Locations Future upside to current production and reserves with large Probable, Possible inventory of unproved undeveloped drilling locations PUD &…
  42. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 42
    Large Resource Potential Upside 1 Net Resource Potential Oil Resource Potential Upside2 Area of Operation (in MMBoe) +0.7 Low End High End +8.2 WTU Tar 0.9 1.4 16.1 Ranger 0.1 0.2 MMBbls of Oil U.Terminal 4.9 6.8 Ford…
  43. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 43
    Change in Proved Reserves - YE13 vs. YE12 Change in Proved Reserves, net MMBoe Balance at 12-31-12: 24.9 Discoveries & Extensions 8.3 Revisions 2.5 Purchase 0.1 Production (2.1) Balance at 12-31-13: 33.7 2012 to 2013 Change:…
  44. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 44
    Year-end 2013 SEC PV-10 Reconciliation For the Year Ended December 31, 2013 PV-10 Reconciliation (in 000s) Proved developed 379,310 Proved undeveloped 124,396 PV-10 Value 503,706 Less: future income taxes, discounted at 10%…
  45. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 45
    EBITDA Reconciliation to Net Income Year Ended Year Ended Year Ended Year Ended Year Ended 12 Months Ended December 31, 2009 December 31, 2010 December 31, 2011 December 31, 2012 December 31, 2013 March 31, 2014 (in millions) (in…
  46. 2014 Annual Meeting of Stockholders – Warren Resources Inc. – slide 46
    Warren Resources, Inc. Please visit our website: www.warrenresources.com Investing in the Future of Energy NASDAQ (WRES) 47

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