Warren Resources Inc. is moving its corporate headquarters from New York City to Denver in a shift aimed at cutting costs amid the commodities downturn and bringing more efficiency to its administrative operations.
The company has long been headquartered in New York City, where it was established in 1990. But management said that as the company has increasingly focused on new assets in Pennsylvania's Marcellus Shale, the Denver office had already been overseeing those operations and conducting much of the company's business. As a result, Warren said it would close its offices in New York City and Roswell, NM, eliminate certain staff at those locations and transfer others to the Denver office.
It's unclear how many positions are to be eliminated, but the layoffs and transfers are expected to begin this quarter and be completed by March 2016, the company said. Warren said it expects the move to Denver to cost about $1.5 million, but it added that after the shift is complete, it would realize $1.5 million in annual general and administrative savings.
The move comes at a time when some independent oil and gas producers across the country, in a struggle with low commodity prices, have announced a series of realignment plans, assets sales, office closures and other cost-cutting measures. Warren acquired Citrus Energy Corp. last year for $325.5 million and with it 5,289 net acres in Northeast Pennsylvania's Wyoming County, where it recently tested its first two Marcellus wells (see Shale Daily, Aug. 18; July 8, 2014).
While Warren's second quarter production increased to 85 MMcf/d from 18 MMcf/d in 2Q2014, its stock price -- like other producers large and small -- has fallen sharply this year. It also recorded a net loss in the second quarter. In addition to its Marcellus assets, Warren has waterflood oil recovery operations in California and coalbed methane production in Wyoming.
The company also said Wednesday that interim chairman Dominick D'Alleva would assume that position permanently. D'Alleva said the company has also launched a search to find a permanent CEO to replace interim CEO Lance Peterson.