Warren

Warren Resources Inc. said this week that it has emerged from bankruptcy after four months of proceedings, announcing that it would continue to cut costs and saying its new capital structure might even allow the company to expand its asset base.

After months of trying to reach an out-of-court agreement with its creditors and bondholders, Warren Resources Inc. became one of the latest oil and natural gas producers to succumb to the commodities downturn, filing voluntary petitions for Chapter 11 bankruptcy protection on Thursday.

Hostilities have climbed further in the once-friendly merger of Energy Transfer Equity LP (ETE) and the Williams Companies Inc. as the latter announced another lawsuit against its now-retreating suitor.

Hostilities have climbed further in the once-friendly merger of Energy Transfer Equity LP (ETE) and the Williams Companies Inc. as the latter announced another lawsuit against its now-retreating suitor.

Warren Resources Inc.produced 980,300 bbl of oil last year, a 12% decline from 2014, the company said in its year-end earnings release. Natural gas production, however, increased to 28 Bcf last year, up from 16.1 Bcf in 2014. The 74% increase reflected the company’s first full year of Marcellus Shale production after it acquiredCitrus Energy Corp. in mid-2014 (see Shale Daily,July 8, 2014). Warren said low commodity prices drove declines in 2015 results. Revenue was down to $88.4 million in 2015 from $150.7 million the prior year. The company reported a full-year net loss of $619.9 million (minus $7.55/share), compared to net income of $24 million (31 cents) in 2014. The loss was largely attributed to a $578.3 million property impairment charge. The company’s average oil price declined to $41.14/bbl, compared to $86.02/bbl in 2014, while its average natural gas price declined to $1.55/Mcf, compared to $3.06/Mcf in 2014. Warren has defaulted on an interest payment for its 9% senior unsecured notes and is in currently in the process of trying to restructure its debt. It has warned investors of bankruptcy twice since February in separate news releases (see Shale Daily,March 14). In addition to the Marcellus Shale in Pennsylvania, the company has waterflood oilfield recovery operations in California and coalbed methane assets in Wyoming.

Warren Resources Inc. has defaulted on a $7.5 million interest payment for its 9% senior unsecured notes that was due on Feb. 1, bringing it one step closer to bankruptcy proceedings.

Warren Resources Inc. said Tuesday that if it can’t reach an out-of-court agreement with its creditors and noteholders about restructuring its debt, the company will likely have to seek Chapter 11 bankruptcy protection.

Warren Resources Inc.has decided not to make a $7.5 million semi-annual interest payment that was due Monday on its 9% senior unsecured notes. The company said it has sufficient liquidity to pay the $300 million notes, of which $167.3 million is outstanding and due by 2022, but is restructuring its balance sheet. Failure to pay the interest does not result in default, Warren said, but if the payment is not made within 30 days the company would default. In that event, Warren would also default under its first and second lien credit facilities. The company has hired Jefferies LLC as a financial adviser to help with the balance sheet restructuring.

Warren Resources Inc. has appointed its new CEO, James A. Watt, to serve on the company’s board of directors. Watt was appointed to fill a vacancy on the board, and the company said he would stand for reelection at its annual shareholder meeting next year. Watt was named CEO Nov. 16, ending a nearly one year-long search to fill the position. Lance Peterson had served as interim CEO until Watt’s arrival. Peterson continues to serve on Warren’s board of directors. The company, which tested its first Marcellus Shale wells earlier this year (see Shale Daily,Aug. 18), also said it has appointed Frank T. Smith, Jr. as its CFO. Smith had previously served as the CFO of Dune Energy Inc. Watt also joined Warren from Dune, where he had served as its CEO.