Warren's 2014 Production Growth Fueled By Marcellus

New York-based Warren Resources Inc. (Nasdaq: WRES) has announced expected total production volumes for the full year 2014 and updated its capital budget and production guidance for the full year 2015.

While year-end audited financials are not yet complete, Warren estimates production for the full year 2014 grew 77% year-over-year to approximately 22.8 billion cubic feet of equivalent (Bcfe), approximately 70% of which is natural gas. This production growth is primarily attributable to increased volumes resulting from the acquisition of the Marcellus assets in the third quarter of 2014.

With the ongoing volatility in commodity and capital markets, Warren is revising its 2015 capital budget lower to approximately $21 million from the company's preliminary $80 million budget released in early December 2014.

The company is now budgeting $13 million in the Marcellus to drill and complete two Upper Marcellus wells in 2015 and for associated facilities. Drilling was completed on the first Upper Marcellus well, the Mirabelli 11H, in late January in the northeast portion of the company's acreage position and completion operations are expected to commence in early March. The second well, the Ruark 11H, is planned in the center of the acreage block, with completion operations expected to commence in early May. Completion operations on two lower Marcellus wells were concluded in January, with initial production expected in mid-February.

In addition, Warren has reduced its facilities and infrastructure budget in California to $8 million and suspended CBM drilling and completion activity in Wyoming, eliminating approximately $20 million of capital previously allocated to that program. As mandated by federal permit restrictions and lease stipulations, drilling on federal lands in the Atlantic Rim, where the bulk of Warren's 2015 program was planned, cannot commence until after August 1^st. Therefore, Warren has ample time until then to re-evaluate the decision to suspend activity should conditions improve.

Warren is updating its full-year 2015 production guidance to reflect the reduction in planned drilling and completion activity. For the full year 2015, Warren expects total production volumes to range between approximately 33 Bcfe to 36 Bcfe, a projected 52% increase over 2014, at the midpoint. Warren expects natural gas volumes to comprise approximately 84% of total production in 2015.

Updated 2015 Capital Budget

The information and tables below set forth Warren's updated forecast for 2015 development activity, capital expenditures and net production based on the information available at the time of this release. Please see the forward-looking statement at the end of this release for more discussion of the inherent limitations of this information.

The table below sets forth Warren's updated 2015 capital expenditure budget by operating area:

Warren is updating its production guidance for the first quarter and full year 2015 to account for the slightly later start of completion operations in the Marcellus in December 2014 and the reduction in planned drilling and completion activity in 2015, respectively. The table below sets forth Warren's updated net production forecast for first quarter and full year 2015 based on the information available at the time of this release.