Warren Resources (WRES) 8-K Regulation FD Disclosure

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Exhibit 99.1

The following are excerpts from the Company's disclosure in connection with its offering of senior notes.

Summary Historical and Pro Forma Combined Financial and Other Data

        The following tables show our summary historical consolidated financial data and our summary unaudited pro forma financial data, each for the periods and as of the dates indicated. The summary historical statement of operations data for the years ended December 31, 2011, 2012 and 2013 and the balance sheet data as of December 31, 2012 and 2013 are derived from our audited consolidated financial statements included in this offering memorandum.

        The summary historical statement of operations data for the three months ended March 31, 2013 and 2014 and the balance sheet data as of March 31, 2014 are derived from our unaudited consolidated financial statements included in this offering memorandum. The historical statement of operations data for the twelve months ended March 31, 2014 is derived by summing our statement of operations data for our year ended December 31, 2013 and the three months ended March 31, 2014 and then deducting our statement of operations data for the three months ended March 31, 2013. The summary unaudited consolidated financial data have been prepared on a consistent basis with our audited consolidated financial statements. In the opinion of management, such summary unaudited consolidated financial data reflect all adjustments (consisting of normal and recurring accruals) considered necessary to present our financial position for the periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received from oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results and other factors.

        The summary unaudited pro forma condensed combined financial data assumes that the Citrus Acquisition, this offering, the issuance of approximately 6.7 million shares of our common stock as part of the consideration for the Citrus Acquisition and the closing of our amended and restated credit facility, including borrowing thereunder to fund a portion of the consideration for the Citrus Acquisition, had taken place on March 31, 2014, in the case of the unaudited pro forma combined balance sheet data, and on January 1, 2013, in the case of the pro forma combined statement of operations data for the year ended December 31, 2013, the three months ended March 31, 2014 and the twelve months ended March 31, 2014.

        These data are subject and give effect to the assumptions and adjustments described in the notes accompanying the unaudited pro forma financial statements included elsewhere in this offering memorandum. The summary unaudited pro forma consolidated financial data are presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the Citrus Acquisition and this offering been consummated on the dates indicated, and do not purport to be indicative of statements of financial position or results of operations as of any future date or for any future period.

        Our historical and pro forma results should be read in conjunction with "Capitalization," "Selected Historical Consolidated Financial Data" and "Management's Discussion and Analysis of Financial

Condition and Results of Operations" included elsewhere herein and our consolidated historical and pro forma financial statements and related notes included in this offering memorandum.

	Historical																		Pro Forma
	Twelve Months Ended December 31,									Three Months Ended March 31,						Twelve Months Ended March 31, 2014						Three Months Ended March 31,						Twelve Months Ended March 31, 2014
																			Year Ended December 31 2013
($ in thousands)	2011			2012			2013			2013			2014									2013			2014
Operating revenues
Oil and gas sales	$	103,371		$	121,797		$	127,925		$	30,819		$	32,879		$	129,985		$	185,964		$	44,110		$	61,236		$	203,089
Transportation revenue		—			—			919			—			1,323			2,242			920			—			1,323			2,243
Total revenues		103,371			121,797			128,844			30,819			34,202			132,227			186,883			44,110			62,559			205,332
Operating expenses
Lease operating expense and taxes		30,637			33,072			36,779			9,796			9,502			36,485			45,749			11,714			14,670			48,705
Depreciation, depletion and amortization		30,517			47,172			44,806			11,570			10,354			43,590			62,328			16,435			16,427			62,320
Transportation expenses		—			—			311			—			565			876			1,369			323			1,030			2,075
General and administrative		14,819			19,844			15,389			4,317			3,966			15,038			17,879			5,262			4,977			17,593
Total operating expenses		75,973			100,088			97,285			25,683			24,387			95,988			127,324			33,733			37,104			130,694
Income from operations		27,398			21,709			31,559			5,136			9,815			36,239			59,559			10,377			25,455			74,638
Other income (expense)
Interest and other income		77			90			5,362			15			134			5,481			5,362			15			134			5,481
Interest expense		(3,188	)		(3,311	)		(2,995	)		(750	)		(754	)		(2,999	)		(28,387	)		(6,554	)		(7,103	)		(28,936	)
Gain (loss) on derivative financial instruments		(2,726	)		(2,975	)		(3,477	)		(1,565	)		(993	)		(2,904	)		(3,477	)		(1,565	)		(993	)		(2,904	)
Total other income (expense)		(5,837	)		(6,196	)		(1,110	)		(2,300	)		(1,613	)		(423	)		(26,502	)		(8,104	)		(7,961	)		(26,359	)
Income before taxes		21,561			15,513			30,449			2,836			8,202			35,816			33,057			2,272			17,494			48,278
Deferred income tax expense (benefit)		(78	)		(7	)		64			7			(8	)		49			64			7			(8	)		49
Net income		21,639			15,520			30,385			2,829			8,210			35,760			32,993			2,265			17,502			48,229
Less dividends and accretion on preferred shares		10			10			10			3			3			10			10			3			3			10
Net income applicable to common stockholders	$	21,629		$	15,510		$	30,375		$	2,826		$	8,207		$	35,757		$	32,983		$	2,263		$	17,499		$	48,219
Other Financial Data:
Adjusted EBITDA(1)		47,245			68,693			77,030			16,854			18,901			79,077			122,552			26,959			40,615			136,208

(1)

For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to its most directly comparable financial measure calculated and presented in accordance with GAAP, please see "—Non-GAAP Financial Measures and Reconciliations."

	Historical
											Pro Forma
	As of December 31,						As of March 31,
											As of March 31, 2014
($ in thousands)	2011		2012		2013		2013		2014
Balance Sheet Data:
Cash and cash equivalents	$	10,614	$	8,475	$	11,620	$	10,745	$	1,834	$	1,834
Oil and gas properties		275,443		301,599		335,354		297,517		332,242		679,388
Property and equipment (net of accumulated depreciation)		16,926		17,941		18,772		18,687		18,714		18,714
Total assets		323,633		352,744		394,805		353,130		375,687		751,975
Total debt (including current portion of long-term debt)		91,151		101,136		96,136		91,136		82,136		411,319
Total liabilities		149,542		159,702		168,712		156,768		140,773		477,061
Total stockholders' equity	$	174,091	$	193,042	$	226,093	$	196,362	$	234,915	$	274,915

Non-GAAP Financial Measures and Reconciliations

        In this offering memorandum, the terms "EBITDA" and "Adjusted EBITDA" are used. EBITDA is a non-GAAP financial measure and is equivalent to earnings before interest, income taxes, depletion, depreciation, amortization and accretion expenses. Adjusted EBITDA is EBITDA, further adjusted to exclude stock-based compensation and unrealized gain or losses on derivatives. We believe EBITDA and Adjusted EBITDA are important financial measurement tools that facilitate comparison of our operating performance and provide information about our ability to service or incur indebtedness and pay for our capital expenditures. This information differs from measures of performance determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These measures are not necessarily indicative of operating profit or cash flow from operating activities as determined under GAAP and may not be equivalent to similarly titled measures of other companies.

        Our management uses Adjusted EBITDA in a number of ways to assess our combined financial and operating performance, and we believe this measure is helpful to management and investors in identifying trends in our performance. Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance while neutralizing the impact of capital structure on results. Accordingly, we believe this metric measures our financial performance based on operational factors that management can impact in the short-term, namely our cost structure and expenses.

        Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Adjusted EBITDA also has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA:

•

does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•

does not reflect changes in, or cash requirements for, our working capital needs;

•

does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;

•

does not reflect certain other non-cash income and expenses; and

•

excludes income taxes that may represent a reduction in available cash.

        We reconcile this non-GAAP financial measure to our net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP. The table below reconciles our historical net income to Adjusted EBITDA.

	Historical																		Pro Forma
										Three Months Ended March 31,						Twelve Months Ended March 31, 2014						Three Months Ended March 31,						Twelve Months Ended March 31, 2014
	Year Ended December 31,																		Year Ended December 31, 2013
($ in thousands)	2011			2012			2013			2013			2014									2013			2014
Net income (loss)	$	21,639		$	15,520		$	30,385		$	2,829		$	8,210		$	35,766		$	32,993		$	2,265		$	17,502		$	48,229
Adjustments:
Income tax expense / (benefit)	$	(78	)	$	(7	)	$	64		$	7		$	(8	)	$	49		$	64		$	7		$	(8	)	$	49
Interest expense		3,188			3,311			2,995			750			754			2,999			28,387			6,554			7,103			28,936
Depreciation, depletion and amortization		30,517			47,172			44,806			11,570			10,355			43,590			62,328			16,435			16,427			62,320
EBITDA		55,266			65,966			78,250			15,156			19,311			82,404			123,772			25,261			41,024			139,534
As further adjusted:
Interest (income) and other (income)		(78	)		(91	)		(5,362	)		(15	)		(134	)		(5,481	)		(5,362	)		(15	)		(134	)		(5,481	)
Stock-based compensation expense		1,546			2,592			2,062			315			532			2,279			2,062			315			532			2,279
Unrealized hedging losses / (gains)		(9,490	)		195			2,080			1,398			(807	)		(125	)		2,080			1,398			(807	)		(125	)
Adjusted EBITDA	$	47,245		$	68,693		$	77,030		$	16,854		$	18,901		$	79,077		$	122,552		$	26,959		$	40,615		$	136,208

CAPITALIZATION

        The following table sets forth our unaudited capitalization as of March 31, 2014:

•

on an actual basis;

•

on an as adjusted basis to give effect to the completion of the Citrus Acquisition, to our closing of the amendment and restatement of our Credit Facility, including related borrowings under our Credit Facility to fund a portion of the acquisition consideration, to our issuance of approximately 6.7 million shares of common stock as part of the acquisition consideration and to the issuance of the notes offered hereby and our application of the estimated net proceeds from this offering in the manner described in "Use of Proceeds."

        This table should be read in conjunction with, and is and is qualified in its entirety by reference to, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and the accompanying notes included elsewhere in this offering memorandum. See "Summary—Summary Historical and Pro Forma Combined Financial and Other Data" and "Selected Historical Consolidated Financial Data."

	As of March 31, 2014
	Actual			As Adjusted
	(in thousands, except share numbers)
Cash and cash equivalents	$	1,834		$	1,834
Long-term debt (including current portion):
Debentures(a)	$	1,636		$	1,636
Credit Facility(b)(c)		80,500			113,832
9.000% Senior Notes due 2022		—			300,000
Discount on Senior Notes		—			(4,149	)
Total long-term debt		82,136			411,319
Stockholders' equity:
8% convertible preferred stock (10,000,000 shares authorized; 10,703 shares issued and outstanding, actual and as adjusted)		128			128
Common stock (100,000,000 shares authorized; 73,550,339 shares issued and outstanding, actual and approximately 80,217,006 shares issued and outstanding, as adjusted)		7			8
Additional paid in capital		471,041			511,041
Accumulated other comprehensive income		201			201
Accumulated deficit		(236,462	)		(236,462	)
Total stockholders' equity		234,915			274,916
Total capitalization	$	317,051		$	686,235

(a)

As of March 31, 2014, we had outstanding $1.6 million of convertible secured debentures that are convertible into shares of our common stock. The principal of the convertible secured debentures is secured at maturity by zero coupon U.S. treasury bonds previously deposited into an escrow account equaling the par value of the debentures and maturing on or before the due date of the debentures. The fair market value of these U.S. treasury bonds at March 31, 2014 was approximately $1.3 million.

(b)

As of March 31, 2014, we had a committed $300.0 million Credit Facility and a borrowing base of $165.0 million. In June 2014, the borrowing base under our Credit Facility was increased to $175.0 million. At March 31, 2014, there were outstanding borrowings of approximately $80.5 million under our Credit Facility and no letters of credit had been issued. In connection with the Citrus Acquisition, we are amending and restating the Credit Facility to provide for a maximum credit amount of $750 million and an initial borrowing base of $225 million.

(c)

As adjusted reflects additional borrowings assumed to be incurred under the Credit Facility in connection with the Citrus Acquisition, prior to consideration of any credit toward the cash purchase price with respect to operations from the July 1, 2014 effective date.

Oil and Natural Gas Acreage

        The following table sets forth our combined acreage position after giving effect to the Citrus Acquisition, as of December 31, 2013 for Warren and June 30, 2014 for Citrus:

	Developed				Undeveloped				Total
	Gross		Net		Gross		Net		Gross		Net
California		1,590		1,576		1,752		1,425		3,342		3,001
New Mexico		1,066		98		2,924		350		3,990		448
Pennsylvania(1)		3,631		2,750		3,351		2,539		6,982		5,289
Texas		704		176		—		—		704		176
Wyoming		30,385		18,462		82,842		69,221		113,227		87,683
Other		948		442		1,732		1,601		2,680		2,043
Total		38,324		23,504		92,601		75,136		130,925		98,640

(1)

Consists of acreage to be acquired in the Citrus Acquisition.

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Exhibit 99.1

Summary Historical and Pro Forma Combined Financial and Other Data
CAPITALIZATION