NEW YORK -- Warren Resources Inc. (Nasdaq: WRES) on Feb. 6 announced 2012 estimated proved oil and gas reserves, 2012 production and provided its 2013 capital budget.
Warren's 2012 net oil and gas production was 2,028,000 barrels of oil equivalent ("BOE"), or an average of 5,541 BOE per day. Oil production for 2012 totaled 1,109,000 net barrels, or an average of 3,030 barrels of oil per day (bopd). This represents a 22% increase from the 911,000 net barrels of oil produced in 2011. Warren produced 5.5 billion cubic feet (Bcf) net of natural gas in 2012, compared to 5.0 Bcf net of natural gas in 2011. The 2012 year-end oil production exit rate was 3,574 gross (2,910 net) bopd, compared to a year-end 2011 exit rate of 3,475 gross (2,830 net) bopd. The 2012 year-end gas production exit rate was 53,800 gross (20,600 net) million cubic feet per day (Mmcfd), compared to a 2011 year-end exit rate of 61,800 gross (14,200 net) Mmcfd.
Warren's total fourth quarter 2012 net oil and gas production was 580,000 boe, or an average of 6,303 boe per day. Oil production for the fourth quarter of 2012 totaled 273,000 net barrels, or an average of 2,966 bopd. This represents an 11% increase from the 247,000 net barrels of oil produced in the fourth quarter of 2011. The company produced 1.8 Bcf net of natural gas in the fourth quarter of 2012, compared to 1.3 Bcf net of natural gas in the fourth quarter of 2011.
Total Proved Reserves
Warren reported that its estimated proved oil and gas reserves totaled 24.9 million barrels of oil equivalent (MMboe) for year-end 2012 and increased approximately 12% from the 22.3 MMboe on Dec. 31, 2011. Total proved reserves for 2012 were 66% crude oil in California and 34% natural gas in Wyoming. Sixty-seven percent of total reserves were proved developed producing and proved developed nonproducing and 33% were proved undeveloped.
The estimated present value of the company's oil and gas reserves at year-end 2012, discounted at 10% per annum and before the impact of income taxes, was $495 million, compared to $526 million for year-end 2011.
Capital Spending Plan for 2013
The company intends to fund 2013 capital expenditures primarily with cash flow from operations. Based on the 2013 commodity price outlook and hedge positions, the company forecasts a 2013 capital expenditure budget of approximately $57.9 million, consisting of $52.6 million for California oil drilling activities and $5.3 million for Wyoming.
The company may adjust its 2013 capital expenditures budget for Wyoming after it completes its evaluation of the deeper rights, including Niobrara oil potential and natural gas pricing.
During 2013, Warren plans to drill three Tar horizontal producers, five Upper Terminal sinusoidal producers, and five Ranger sinusoidal producers in the Wilmington Townlot Unit (WTU) in California. Additionally, Warren plans to drill three Ranger sinusoidal water injectors in the WTU. In the North Wilmington Unit (NWU), the company plans to drill four sinusoidal producers in the Ranger formation and three sinusoidal injectors in 2013.
The 2013 WTU capital budget consists of $28.1 for drilling and $5.3 million for facilities improvements and other infrastructure costs. Warren plans to spend approximately $11.6 million for drilling and $4.6 million on infrastructure improvements in the NWU in 2013. Additionally, the company will be performing 3-D seismic mapping of the WTU and NWU geological formations at a budgeted cost of approximately $3.0 million.
The company’s full news release is available on the web.