Warren Resources Inc.

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
16MM
Description

Purchase of upstream and midstream natural gas assets in the Washakie Basin, Wyo. for about $16.1 million.

Warren Resources Inc. (Nasdaq: WRES) has closed on its purchase of both upstream and midstream natural gas assets in the Washakie Basin, Wyoming, from Anadarko Petroleum Corp. (NYSE: APC) for about $16.1 million.

Warren bought 79% of Anadarko’s working interest in the Spyglass Hill Unit area within the Atlantic Rim Project,representing about 37,142 net leasehold acres for $11.4 million. The purchase increased its working interest in the entire unit from 30.1% to 62.9%.

Warren’s working interest in three participating areas also increased in the Doty Mountain area, Sun Dog area and the Grace Point area as a result of the agreement between the two companies.

Warren also purchased about 26.5% of Anadarko’s interest in the Catalina Unit area within the Atlantic Rim Project, representing about 1,121 net leasehold acres for $700,000, which increased its working interest in the entire unit area from 16.9% to about 22%.

Finally, Warren bought all of Anadarko’s 50% interest in the gas gathering, compression and pipeline assets within the Atlantic Rim Project for $4 million. The midstream assets include 59 miles of gathering lines and compression equipment that move natural gas from the Spyglass Hill Unit area to the Wyoming Interstate Company interstate gas pipeline.

As a result of the transaction, Warren's estimated proved developed reserves in the Atlantic Rim increased by approximately 18.3 billion cubic feet. Additionally, the acquisition will add natural gas production of about 7.8 million cubic feet (MMcf) per day. As a result, Warren acquired proved developed reserves at a price of $0.65 per thousand cubic feet ("Mcf"), or approximately $1,550 per flowing Mcf, of natural gas production.

Warren exercised its preferential rights to purchase Anadarko's interests after Anadarko advised it had planned to sell the assets Double Eagle Petroleum Co. Warren financed the acquisition with cash-on-hand and borrowings under its senior credit facility.

Warren Resources Inc. is an independent upstream energy company based in New York. Anadarko is based in Houston.