NEW YORK, Aug. 21, 2007 (PRIME NEWSWIRE) -- Warren Resources, Inc. (Nasdaq:WRES) announced today the following updates for its Wyoming operations.
Atlantic Rim Coalbed Methane project in the eastern Washakie Basin, Wyoming
Warren announced that the U.S. Bureau of Land Management has issued the necessary permits for drilling 48 producing wells on 80-acre spacing and 3 water injection wells in the Sun Dog Unit as part of its Wyoming Atlantic Rim coalbed methane joint venture with Anadarko Petroleum Corporation. It is also expected that additional permits for the balance of the planned 69 producers and 6 water injectors in the Sun Dog Unit will be issued in the near future. After Warren drills the 69 new Sun Dog wells, it will have an overall working interest of approximately 43% in the participating area that also includes the 12 previously drilled wells.
Due to the additional time required to obtain initial drilling permits, Warren expects that approximately 38 producers and 3 water injection wells will be drilled by the end of the fourth quarter of 2007 and the balance of 31 producers and related water injection wells will be drilled in the first two months of 2008. As a result, the Company's 2007 capital expenditure budget will be reduced by $6 million to $116 million. These deferred expenditures will be incurred during the first 2 months of 2008.
Also within the Atlantic Rim project, we expect to participate in the drilling of 33 additional development coalbed methane wells in the Cow Creek Field which will become part of the Catalina Unit. Warren will have an initial 5.3% working interest in these wells, which would increase to approximately 17% upon full development of the Unit. The operator, Double Eagle Petroleum, reported that it commenced drilling these wells on August 6, 2007.
South Seminoe Exploratory Well in the Hanna Basin, Wyoming
Warren reported that its South Seminoe exploratory well, the Ferris well, in the Hanna Basin appears to be non-commercial after fracture stimulation in the lower section of the Tensleep zone. As earlier reported, although hydrocarbons were encountered during drilling of the Ferris well, Warren encountered tight, low porosity reservoir rocks. The Ferris well was drilled to the base of the Tensleep formation and casing was set to a total well depth of 16,670 feet. Warren is currently evaluating its options concerning its 7,100 net acres in the Hanna Basin.
Forward-looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Warren believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. See "Risk Factors" in the Company's 2006 Annual Report on Form 10-K and other public filings.
About Warren Resources
Warren Resources, Inc. is a growing independent energy company engaged in the exploration and development of domestic natural gas and oil reserves. Warren is primarily focused on the exploration and development of coalbed methane properties located in the Washakie Basin in the Rocky Mountain region of Wyoming and its water flood oil recovery programs in the Wilmington Townlot Unit and North Wilmington Unit located in the Los Angeles Basin of California. The Company is headquartered in New York, New York, and its exploration and development subsidiary, Warren E&P, Inc., is based in Casper, Wyoming and Long Beach, California.