Warren Resources (WRES) DEF 14A Definitive proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.             )

Filed by the Registrant  x
Filed by a Party other than the Registrant  o
Check the appropriate box:
o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material Pursuant to §240.14a-12

WARREN RESOURCES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:
o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

489 Fifth Avenue, 32nd Floor
New York, NY 10017

April 11, 2007

Dear Stockholder:

I would like to extend a personal invitation for you to join us at our Annual Meeting of Stockholders on Wednesday, May 16, 2007, at 9:30 a.m. (EST) at The Cornell Club, 6 East 44th Street, New York, NY 10017.

At this year’s meeting, you will vote on:

·the election of four directors,

·the ratification of Grant Thornton LLP’s appointment as independent auditors, and

·transact such other business as may properly come before the meeting.

Attached you will find a notice of meeting and proxy statement that contains further information about these items and the meeting itself.

Whether or not you plan to attend the Annual Meeting of Stockholders, we urge you to vote and submit your proxy in order to ensure the presence of a quorum of over 50% of the outstanding shares of common stock on the record date of March 30, 2007, which is required for the transaction of business. If you attend the meeting, you will, of course, have the right to revoke the proxy and vote your shares in person. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares.

Your vote is very important to us and our business. We value your opinions and encourage you to participate in this year’s Annual Meeting by voting your proxy. You may vote by signing and returning your proxy card in the enclosed envelope.

I hope to see you in New York.

Sincerely,

Norman F. Swanton

Chairman & Chief Executive Officer

NOTICE OF 2007 ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Warren Resources, Inc.

The Annual Meeting of Stockholders of Warren Resources, Inc. (the “Company” or “Warren”) will be held at The Cornell Club, 6 East 44th Street, New York, NY 10017, on Wednesday, May 16, 2007, at 9:30 a.m., local time. The purposes of the meeting are:

1.To elect four directors to the Board of Directors to serve until the 2010 Annual Meeting of Stockholders;

2.To ratify the appointment of Grant Thornton LLP as independent auditors of the Company to serve for the 2007 fiscal year; and

3.To transact such other business as may properly come before the meeting and at any adjournments or postponements of the meeting.

The Board of Directors set March 30, 2007, as the record date for the meeting. This means that owners of Common Stock at the close of business on that date are entitled to:

·receive this notice of the meeting, and

·vote at the meeting and any adjournments or postponements of the meeting.

We will make available a list of Stockholders as of the close of business on March 30, 2007, for inspection by Stockholders during normal business hours from May 4 to May 15, 2007, at the Company’s principal place of business, 489 Fifth Avenue, 32nd Floor, New York, NY 10017. This list also will be available to Stockholders at the meeting.

It is important that your shares be represented and voted at the Meeting. Please mark, sign, date and mail the enclosed proxy card to American Stock Transfer & Trust Company in the enclosed postage-paid envelope. A postage-prepaid envelope has been provided for your convenience. You may revoke your proxy at any time before the vote is taken by sending to the Corporate Secretary of the Company a proxy with a later date. Alternatively, you may revoke your proxy by delivering to the Corporate Secretary of the Company a written revocation prior to the Annual Meeting or by voting in person at the Annual Meeting.

Regardless of the number of shares of Warren that you hold, as a stockholder your vote is very important and the Board strongly encourages you to exercise your right to vote. We urge each stockholder to promptly sign and return the enclosed proxy card.

	By Order of the Board of Directors
	/s/ David E. Fleming
	David E. Fleming
	Senior Vice President, General Counsel & Corporate Secretary
New York, New York
April 11, 2007

WARREN RESOURCES, INC.

489 Fifth Avenue, 32nd Floor

New York, NY 10017

PROXY STATEMENT

FOR 2007 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2007

April 11, 2007

We are furnishing you this proxy statement in connection with the solicitation of proxies by our Board of Directors to be voted at the Annual Meeting of Stockholders of Warren Resources, Inc. The Annual Meeting will be held on Wednesday, May 16, 2007. In this proxy statement, Warren Resources, Inc. is referred to as the “Company” or “Warren.” This proxy statement and the enclosed proxy card are first being mailed to stockholders on or about April 11, 2007.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Where and when is the Annual Meeting?

The Annual Meeting will be held at The Cornell Club, 6 East 44th Street, New York, NY 10017, on Wednesday, May 16, 2007, at 9:30 a.m. local time.

What is the purpose of the Annual Meeting?

At the Annual Meeting, Stockholders will vote upon:

·The election of four directors for three-year terms;

·the ratification of the appointment of Grant Thornton LLP as our independent auditors for fiscal year 2007; and

·any other matters that may properly come before the meeting.

How does the Board recommend that I vote?

The Board recommends that you vote:

·FOR each of the nominees for director;

·FOR the ratification of Grant Thornton, LLP as our independent auditor for 2007.

Why should I vote?

Your vote is very important. Regardless of the number of shares you hold, the Board strongly encourages you to exercise your right to vote as a stockholder of the Company.

Who may vote?

All Stockholders of record of Warren’s common stock at the close of business on March 30, 2007, which we refer to as the record date, are entitled to receive notice of the Annual Meeting and to vote the shares of common stock held by them on the record date. Each outstanding share of common stock entitles its holder to cast one vote for each matter to be voted upon.

What is a proxy?

It is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated two of our directors as proxies for the 2007 Annual Meeting of Stockholders. These are directors Michael R. Quinlan and Chet Borgida.

What is a proxy statement?

It is a document that Securities and Exchange Commission (“SEC”) regulations require us to give you when we ask you to sign a proxy card designating Michael R. Quinlan and Chet Borgida as proxies to vote on your behalf.

What is the difference between a shareowner of record and a shareowner who holds stock in street name?

·If your shares are registered in your name, you are a shareowner of record.

·If your shares are held in the name of your broker or bank, your shares are held in street name.

How do I vote?

If your shares of common stock are held by a broker, bank, or other nominee (i.e., in “street name”), you will receive instructions from your nominee, which you must follow in order to have your shares voted. The instructions may appear on the special proxy card provided to you by your nominee (also called a “voting instruction form”). Your nominee may offer you different methods of voting, such as by telephone or Internet.

If you hold your shares of common stock in your own name as a holder of record, you may vote in person at the Annual Meeting or instruct the proxy holders named in the enclosed proxy card how to vote your shares by marking, signing, dating, and returning the proxy card in the postage-paid envelope that we have provided to you.

Proxies that are executed, but do not contain any specific instructions, will be voted “FOR” the election of the nominees for directors specified in this proxy statement and “FOR” ratification of the appointment of auditors. The persons named in the proxy will have authority to vote in accordance with their own discretion on any other matters that properly come before the meeting.

Who may attend the meeting?

Only Stockholders on the record date are invited to attend the Annual Meeting. Proof of ownership of Warren Resources common stock, as well as a form of personal identification photo, may be requested in order to be admitted to the Meeting. If you are a Stockholder of record, your name can be verified against our Stockholder list. If you hold your Warren shares in “street name”—for instance, through a broker—you must request a proxy from your broker or other nominee holding your shares in record name on your behalf in order to attend the meeting and vote at that time (your broker may refer to it as a “legal” proxy). If you own shares in street name, bring your most recent brokerage statement with you to the meeting. We can use that to verify your ownership of Common Stock and admit you to the meeting; however, you will not be able to vote your shares at the meeting without a legal proxy from your broker.

Stockholders will be admitted to the Annual Meeting beginning at 9:15 a.m. No cameras, recording equipment or electronic devices will be permitted in the Meeting and large bags, briefcases or packages may be subject to inspection.

2

What are the quorum and voting requirements to elect the nominees for director and to ratify the appointment of our independent auditors?

The presence, in person or by proxy, of holders of at least a majority of the total number of outstanding shares of common stock entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting. As of the record date of March 30, 2007, there were 54,178,336 shares of common stock outstanding.

For proposal 1, the election of directors, the four nominees receiving the greatest number of votes at the Annual Meeting will be elected, even though such nominees may not receive a majority of the votes cast.

For proposal 2, ratification of the appointment of our independent auditors, the appointment of the auditors will be ratified if the votes cast “for” ratification exceed the votes cast “against.”

For any other business that may properly come before the Annual Meeting, the vote of a majority of the shares voted on the matter will constitute the act of the Stockholders on that matter, unless the law, or our articles of incorporation or bylaws, require the vote of a greater number.

How are votes counted?

Each share of common stock is entitled to one vote on each matter submitted to the Stockholders. Abstentions and “broker non-votes” will be counted only for purposes of establishing a quorum, but will not otherwise affect the outcome of the voting. Broker non-votes are proxies received from brokers or other nominees holding shares on behalf of their clients who have not received specific voting instructions from their clients with respect to non-routine matters. In counting the votes cast, only those cast “for” and “against” a matter are included, although you cannot vote “against” a nominee for director.

If you hold your shares of common stock in your own name as a holder of record, and you fail to vote your shares, either in person or by proxy, the votes represented by your shares will not affect the vote. If, however, your shares are held in “street name” and you fail to give instructions as to how you want your shares voted, the broker, bank or other nominee may vote the shares in their own discretion on certain routine matters, including the election of directors.

Will other matters be voted on at the Annual Meeting?

We are not aware of any other matters to be presented at the Annual Meeting other than those described in this proxy statement. If any other matters not described in the proxy statement are properly presented at the meeting, proxies will be voted in accordance with the discretion of the proxy holders.

Can I revoke my proxy?

You may revoke your proxy at any time before it has been exercised by:

·Filing a written revocation with the Corporate Secretary at the following address: Warren Resources, Inc., 489 Fifth Avenue, 32nd Floor, New York, NY 10017;

·Filing a duly executed proxy bearing a later date; or

·Appearing in person and voting by ballot at the Annual Meeting.

Any shareholder of record as of the record date attending the Annual Meeting may vote in person whether or not they previously have given a proxy, but the presence (without further action) of a shareholder at the Annual Meeting will not constitute revocation of a previously given proxy.

3

What other information should I review before voting?

Our 2006 annual report to Stockholders, including financial statements for the fiscal year ended December 31, 2006, is being mailed to Stockholders concurrently with this proxy statement. The annual report, however, is not part of the proxy solicitation material. A copy of our annual report on Form 10-K filed with the Securities and Exchange Commission (the SEC), including the financial statements, may be obtained without charge by:

·Accessing Warren’s website at www.warrenresources.com or the EDGAR database at the SEC’s website at www.sec.gov, or

·Writing to Warren Resources, Inc., Investor Relations, Warren Resources, Inc., 489 Fifth Avenue, 32nd Floor, New York, NY 10017;

You also may obtain copies of our Form 10-K from the SEC at prescribed rates by writing to the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information on the SEC’s public reference rooms.

Your vote is very important. Please take the time to vote by completing and mailing the proxy card. A postage-prepaid envelope has been provided for your convenience. If your proxy card is returned unsigned, then your vote cannot be counted. If the returned proxy card is signed and dated without indicating how you want to vote, then your proxy will be voted as recommended by the Board of Directors.

Where can I find the voting results of the meeting?

We will announce voting results at the meeting, and we will publish the final results in our quarterly report on Form 10-Q for the second quarter of 2007. You can get a copy of this and other reports free of charge on the Company’s website at www.warrenresources.com, or by contacting our Investor Relations Department at (212) 697-9660.

4

WARREN BOARD OF DIRECTORS

Item 1—Election of Directors

The Company’s By-Laws provide for the annual election of Directors. The Company’s By-Laws also provide that the number of Directors shall be determined by the Board, which has set the number at eleven. The Board of Directors of Warren is divided into three classes of directors for purposes of election. One class of directors is elected at each annual meeting of stockholders to serve for a three-year term.

At the 2007 meeting, the terms of three existing directors are expiring. Two of the director nominees listed below are current directors of the Company and two are proposed new directors. If elected at this meeting, the directors will hold office until the expiration of each of their terms in 2010. Those directors not up for election this year will continue in office for the remainder of their terms.

We have no reason to believe that any of the nominees will be unable or unwilling for good cause to serve if elected. If a nominee is unavailable for election, then the proxies will be voted for the election of another nominee proposed by the Board or, as an alternative, the Board may reduce the number of directors to be elected at the meeting. Each director holds office until his or her successor has been duly elected and qualified or the director’s earlier resignation, death or removal.

The Board recommends that you vote “FOR” each of the nominees listed below.

DIRECTORS NOMINATED THIS YEAR FOR TERMS EXPIRING IN 2010

Anthony L. Coelho, age 64, joined our Board as an independent director in May 2001 and serves on the compensation and corporate governance committees of the Board. From December 2000 to the present, Mr. Coelho has devoted his time to serving on the boards of directors listed below and as an independent consultant and adviser. From 1998 through November 2000, he served as the General Chairman for the U.S. Presidential campaign of Vice President Al Gore. From 1995 to 1998, he was Chairman and Chief Executive Officer of ETC w/tci, Inc. an education and training technology company in Washington, D.C. and from 1990 to 1995, he served as President and CEO of Wertheim Schroeder Investment Services, Inc. From 1978 to 1989, he served five terms in the U.S. Congress, representing the State of California as a member of the U.S. House of Representatives. During his congressional terms, he served as Democratic Majority Whip from 1987 to 1989 and authored the Americans with Disabilities Act. Congressman Coelho was also appointed chairman of the President’s Committee on the Employment of People with Disabilities by President Clinton. Congressman Coelho has served on a number of corporate boards and he currently serves on the boards of Ripplewood Holdings, LLC and Service Corporation International, a publicly traded company. Congressman Coelho earned a Bachelor of Arts degree in Political Science from Loyola Marymount University in 1964.

Dominick D’Alleva, age 55, was our Secretary until 2002 and has been a director since June 1992. He serves on the compensation and corporate governance committees of the Board. Additionally, from 1995 to the present, he has been a principal with D and D Realty Company, LLC, a privately owned New York limited liability company involved in the acquisition and financing of real estate. From 1986 to 1995, he was engaged in residential New York City real estate for his own account and as general counsel to various real estate acquisition firms, where he negotiated contracts for the acquisition and financing of commercial real estate. From 1983 to 1985, he served as Executive Vice President, Director and General Counsel of Swanton Corporation, which engaged in energy, retail and financial services businesses. From 1980 to 1983 he was Associate Counsel of Damson Oil Corporation. From 1977 to 1980 he was an associate with Simpson, Thatcher & Bartlett specializing in securities and corporate law. Mr. D’Alleva received a Bachelor of Arts degree Summa Cum Laude from Fordham University in 1974 and earned his Juris Doctor degree with honors from Yale University in 1977.

5

Espy Price, age 65, is nominated to become a new director of the Company. Mr. Price retired in late 1999 as Vice President and General Manager of Chevron’s Mid-Continent Business Unit, where he was responsible for all onshore USA exploration and production. From 1992 to 1996, he was Vice President of Chevron Overseas Petroleum, Inc., where he was responsible for Chevron’s joint venture in the Republic of Kazakhstan. From 1990 to 1992, he was Vice President of Chevron’s Gulf of Mexico Business Unit. From 1985 to 1990, he was employed at P.T. Caltex Pacific Indonesia, where he was Executive Vice President and Managing Director. From 1965 to 1985, he held various petroleum engineering positions with Chevron. Mr. Price earned a Bachelor of Science in Petroleum Engineering in 1963 and a Master of Science in Petroleum Engineering in 1969 from the University of Southwestern Louisiana.

James M. McConnell, age 66, is nominated to become a new director of the Company. Mr. McConnell retired in 2002 from Instron Corporation, where he was President and CEO from 1990 to 2002. Instron Corporation is a leading supplier of instruments and systems for characterization of the mechanical properties of materials and systems. From 1986 to 1990, he was the President and CEO of Emerson Electric-Automatic Switch Division, and from 1985 to 1986 Mr. McConnell was President and COO of Rosemount Division of Emerson Electric and Group VP of Emerson Electric. Mr. McConnell currently serves on the Board of Directors of ESCO Technology, a NYSE listed company. He earned a Bachelor of Arts degree from the University of Texas at Austin in Mathematics and Physics in 1963.

Although they are not being voted upon this year, the Company has the following current directors:

CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2009

Lloyd G. Davies, age 70, joined the board of directors in July 2001. On March 17, 2006, Mr. Davies was appointed Executive Vice President of Warren and Chairman and Chief Executive Officer of Warren’s principal operating subsidiary, Warren E&P, Inc., based in Casper, Wyoming (“Warren E&P”). For the prior seven years he was in retirement. From 1992 through 1994, Mr. Davies was the Assistant Division Manager for the Western U.S. area for Texaco. Prior to that, from 1990 through 1992, Mr. Davies was the Manager and Director of Operations for Texaco’s Far East Operations Division. During his career at Texaco, Mr. Davies was responsible for Texaco’s 50% share in Caltex in Indonesia, which activities included new field development waterflooding and the world’s largest steam flood operation. Mr. Davies also acted as Manager of Reservoir Engineering for ARAMCO in Saudi Arabia. Mr. Davies received a Bachelor of Science Degree in Petroleum Engineering from the University of Oklahoma in 1958. In 1966, he received a Master of Science Degree in Petroleum Engineering with a Minor in Math from the University of Texas.

Leonard DeCecchis, age 58, joined the board in September 2006 and serves on the audit committee of the board. Mr. DeCecchis retired from Prestone Products Corporation, where he was Executive Vice President and Chief Financial Officer of Prestone Products Corporation and a member of its board of directors until June 1999, and has been an investor in real estate and numerous business ventures since that time. In 1994, Mr. DeCecchis participated in a management buyout of Prestone antifreeze and other car care products from First Brands Corporation, a NYSE company. The new Prestone management team was successful in growing sales and doubling operating income within three years. In 1997, the company was sold to Allied Signal Corporation yielding a substantial return on investment to the management investors. From 1986 to 1994, Mr. DeCecchis was Vice President and Treasurer of First Brands Corporation, which had also been a management buyout of the automotive and home products divisions of Union Carbide Corporation. Mr. DeCecchis joined Union Carbide in 1974 and held numerous positions in auditing, treasury and financial reporting. In 1971, Mr. DeCecchis began his career at Peat Marwick Mitchell & Co. Mr. DeCecchis received a Bachelor’s degree from Pace University in 1971 and a Master of Business Administration from Fordham University in 1979. He was previously a Certified Public Accountant in New York.

6

Thomas G. Noonan, age 68, joined the Board as a director in November 1997 and until March 16, 2006 served on the compensation committee of the Board. From 1980 to 1997, he served as Manager of Quality Assurance for Mars Inc., an international food and candy company. From 1961 to 1979, he was a microbiologist for the Environmental Department of the State of New York. Mr. Noonan received a Bachelor of Science degree from Fordham University in New York in 1959. He is the brother-in-law of Mr. Swanton.

CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2008

Chet Borgida, age 62, was elected to the Board of Directors in November 2004 and also serves as a member of our audit committee, which he chairs, and the compensation committee. Mr. Borgida has more than 30 years of domestic and international management experience in auditing and advising retail, distribution and media businesses. He was a partner at Grant Thornton LLP (Warren’s independent auditors) from 1977 to 2001. While at Grant Thornton LLP, Mr. Borgida had no involvement in the review or preparation of Warren’s audited financial statements. Since 2006, he has been serving as the Chief Operating Officer of the Naples Realty Group, Inc. From 2001 to 2004, Mr. Borgida was a Senior Vice-President and Chief Financial Officer of Cross Media Marketing Corporation. Mr. Borgida was also a director and member of the audit committees of Brand Partners Group, Inc., and Correctional Services Corporation, both Nasdaq listed companies. He graduated from Hunter College with a Bachelor Degree in Business Science in 1967. He is a member of the American Institute of Certified Public Accountants.

Michael R. Quinlan, age 62, joined the Board as a director in January 2002 and serves on the corporate governance committee of the Board, which he chairs. From 1963 to 2006 Mr. Quinlan was employed by the McDonald’s Corporation. In 1979, Mr. Quinlan was appointed to the board of directors of McDonald’s and served as the Chairman of the Board and Chief Executive Officer from 1990 to 1998. From 1998 to 1999, he served as Chairman of the Board of McDonald’s Corporation. From 1987 to 1990, he served as the President and Chief Executive Officer of McDonalds. Currently he serves as the Chairman Emeritus of McDonalds Corporation. Mr. Quinlan is chairman of the board of trustees of both Ronald McDonald House Charities and Loyola University Chicago. Additionally, he is a member of the board of trustees of Loyola University Health System. He is also on the board of directors of Dun and Bradstreet Corporation. Mr. Quinlan earned a Bachelor of Science degree in 1967 and a Master’s of Business Administration from Loyola University Chicago in 1970. He has been awarded Honorary Doctors of Law Degrees from Loyola University Chicago, Elmhurst College and Illinois Benedictine College.

Norman F. Swanton, age 68, is and has been our President, Chairman of the Board and Chief Executive Officer since we were founded in June 1990. From October 1986 to 1990, he served as an independent financial advisor. From 1972 to 1985, he served as Chairman of the Board, President and Chief Executive Officer of Swanton Corporation, a publicly held company engaged in energy, retail and financial services businesses. From 1961 to 1972, he served as an executive officer for Glore, Forgan, Staats, Inc. and a divisional controller for Hayden Stone, Inc. which were New York Stock Exchange member securities and underwriting firms. He also served as a principal consultant to the Trust Fund of the New York Stock Exchange serving as its representative in the liquidation of several former New York Stock Exchange member firms. Mr. Swanton received his Bachelor of Arts Degree in History and Political Science from Long Island University in 1962 and attended Bernard Baruch Graduate School of Business in a graduate degree program in Accountancy and Finance from 1963 to 1966. He is the brother-in-law of Thomas G. Noonan.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE PROPOSAL TO ELECT THE FOUR NOMINEES TO THE BOARD OF DIRECTORS.

7

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS’ MATTERS

The Board is elected by the shareholders to oversee their interest in the long-term health and the overall success of the business and its financial strength. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the shareholders. The Board selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Company.

Warren has always taken the issue of corporate governance seriously. The Board is comprised of a majority of independent directors and the Audit Committee, the Corporate Governance Committee and the Compensation Committee are comprised entirely of independent directors.

The board of directors has established the following standing committees: audit, compensation and corporate governance.

The table below shows the current membership of each committee of the Board and the number of meetings each committee held in 2006:

Director	Audit	Compensation		Governance
Mr. Borgida	Chair		X
Mr. Coelho			Chair		X
Mr. DeCecchis	X
Mr. D’Alleva	X		X		X
Mr. Quinlan*					Chair
2006 Meetings	8		4		2

(*)Serves in his capacity as Lead Director

Audit Committee.   The Audit Committee consists of Messrs. Borgida, DeCecchis and D’Alleva. Mr. Borgida is chairman of the Audit Committee and he and Mr. DeCecchis are deemed by the Company to be “audit committee financial experts”.

The audit committee reviews the preparation of and the scope of the audit of our annual consolidated financial statements, reviews drafts of such statements, makes recommendations as to the engagement and fees of the independent auditors, and monitors the functioning of our accounting and internal control systems by meeting with representatives of management and the independent auditors. This committee has direct access to the independent auditors and counsel to Warren and performs such other duties relating to the maintenance of the proper books of account and records of Warren and other matters as the board of directors may assign from time to time.

The purpose of the Audit Committee is to assist the Board in monitoring:

·the integrity of the Company’s financial statements;

·the Company’s compliance with legal and regulatory requirements;

·the independent auditor’s qualifications and independence;

·the performance of the Company’s internal and independent auditors; and

·the business practices and ethical standards of the Company.

The Audit Committee is also directly responsible for the appointment, approval of compensation, retention and oversight of the work of the Company’s independent auditor, Grant Thornton LLP, and the preparation of the Audit Committee report.

8

All of the members of the Audit Committee meet the independence requirements of the Nasdaq Stock Market, the Sarbanes-Oxley Act, the Securities Exchange Act and the rules of the Securities and Exchange Commission (“SEC”) adopted thereunder, and the Company’s Corporate Governance Guidelines. The Charter of the Audit Committee can be found on our website at www.warrenresources.com

Compensation Committee.   The Compensation Committee consists of Messrs. Borgida, Coelho and D’Alleva. Mr. Coelho is the chairman of the Compensation Committee. The Compensation Committee has sole authority to administer our stock option plans. The Compensation Committee also reviews and makes recommendations regarding the compensation levels of the Company’s senior management.

The Charter of the Compensation Committee can be found on our website at www.warrenresources.com.

Corporate Governance Committee.   The Corporate Governance Committee consists of Messrs. Quinlan, D’Alleva and Coelho as members of the Corporate Governance Committee. Mr. Quinlan is the chairman of the Corporate Governance Committee.

The purposes of the Corporate Governance Committee include without limitation to:

·assist the Board in identifying qualified individuals to become directors;

·recommend to the Board qualified director nominees for election at the stockholders’ Annual Meeting;

·determine membership on the Board committees;

·recommend Corporate Governance guidelines;

·conduct annual self-evaluations of the Board and the Corporate Governance Committee; and

·report annually to the Board on the Chief Executive Officer succession plan.

The Charter of the Corporate Governance Committee can be found on our website at www.warrenresources.com.

Code of Business Conduct for All Directors, Officers and Employees

The Board has adopted a Code of Business Conduct for all directors, officers and employees. It is the responsibility of every Company director, officer and employee to maintain a commitment to high standards of conduct and ethics. It is the intent of the Code of Business Conduct to inspire continuing dedication to the fundamental principles of honesty, loyalty, fairness and forthrightness. There shall be no waiver of any part of this Code for any director or officer except by a vote of the Board of Directors or a designated Board committee that shall ascertain whether a waiver is appropriate under all the circumstances. In case a waiver of this Code is granted to a director or officer, the notice of such waiver shall be posted on our website at www.warrenresources.com. A copy of the Code of Business Conduct is available on our website at www.warrenresources.com.

Code of Ethics for Senior Financial Officers

The Board has also adopted a separate Code of Ethics for our chief executive officer, chief financial officer and chief accounting officer (“Senior Financial Officers’ Code”). Each of the covered officers has to certify on an annual basis that the officer shall:

·Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships;

9

·Provide constituents with information that is accurate, complete, objective, relevant, timely and understandable;

·Comply with all applicable laws, rules and regulations of federal, state and local governments, and other appropriate private and public regulatory agencies;

·Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing the officer’s independent judgment to be subordinated;

·Respect the confidentiality of information acquired in the course of business except when authorized or otherwise legally obligated to disclose the information, acknowledging that confidential information acquired in the course of business is not to be used for personal advantage;

·Proactively promote ethical behavior among employees at Warren and as a responsible partner with industry peers and associates;

·Maintain control over and responsibly manage all assets and resources employed or entrusted to the officer by Warren; and

·Report illegal or unethical conduct by any director, officer or employee that has occurred, is occurring or may occur, including any potential violations of the Senior Officers’ Code or the Code of Business Conduct.

There shall be no waiver of any part of the Senior Financial Officers’ Code except by a vote of the Board of Directors or a designated Board committee that shall ascertain whether a waiver is appropriate under all the circumstances. In case a waiver of the Senior Financial Officers’ Code is granted, the notice of such waiver shall be posted on our website at www.warrenresources.com. A copy of the Senior Financial Officers’ Code that has been adopted by the Board of Directors is available on our website at www.warrenresources.com.

Selection of Directors

The Company’s Corporate Governance Guidelines state that the Corporate Governance Committee shall, for positions on the Board of Directors not currently filled: (a) identify the personal characteristics needed in a director nominee so that the Board as a whole will possess the Qualifications of the Board as a Whole as these qualifications are set forth in the Corporate Governance Guidelines; (b) compile, through such means as the Committee considers appropriate, a list of potential director nominees thought to possess the Individual Qualifications identified in the Corporate Governance Guidelines; (c) if the Committee so determines it to be appropriate, engage an outside consultant to assist in the search for nominees and to conduct background investigations on all nominees regardless of how nominated; (d) review the resume of each nominee; (e) conduct interviews with the nominees meeting the desired set of qualifications; (f) following interviews, compile a short list of nominees (which, at the discretion of the Committee, may consist of a single individual) who may meet, at a minimum, with the Chairman of the Board, the Chief Executive Officer and the Chairman of the Corporate Governance Committee and/or the Lead Director; and (g) evaluate the nominee(s) in relationship to the culture of the Company and the Board and its needs.

Minimum Criteria for Board Members

Each Candidate must possess at least the following specific minimum qualifications:

·Each Candidate shall be prepared to represent the best interests of all of the Company’s Stockholders and not just one particular constituency.

10

·Each Candidate shall be an individual who has demonstrated integrity and ethics in his/her personal and professional life and has established a record of professional accomplishment in his/her chosen field.

·No Candidate, or family member (as defined in NASD rules), or affiliate or associate (each as defined in Rule 405 under the Securities Act of 1933, as amended) of a Candidate, shall have any material personal, financial or professional interest in any present or potential competitor of the Company.

·Each Candidate shall be prepared to participate fully in Board activities, including active membership on at least one Board committee and attendance at, and active participation in, meetings of the Board and the committee of which he or she is a member, and not have other personal or professional commitments that would, in the Governance Committee’s sole judgment, interfere with or limit his or her ability to do so.

·Each Candidate shall be willing to make, and financially capable of making, the required investment in the Company’s stock in the amount and within the timeframe specified in the Company’s Corporate Governance Principles and Practices.

Desirable Qualities and Skills

In addition, the Governance Committee also considers it desirable that Candidates possess the following qualities or skills:

·Each Candidate should contribute to the Board’s overall diversity—diversity being broadly construed to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds.

·Each Candidate should contribute positively to the existing chemistry and collaborative culture among Board members.

·Each Candidate should possess professional and personal experiences and expertise relevant to the Company’s goal of being a leading exploration and development company. At this stage of the Company’s development, relevant experiences might include, among other things, senior level executive experience and relevant senior level expertise in one or more of the following areas—engineering, finance, accounting, sales and marketing, organizational development, information technology and public relations.

Affirmative Determinations Regarding Director Independence and Other Matters

The Board of Directors has determined each of the following directors to be an “independent director” as such term is defined in Marketplace Rule 4200(a)(15) of the National Association of Securities Dealers (the “NASD”):

Chet Borgida

Anthony Coelho

Dominick D’Alleva

Leonard DeCecchis

Michael R. Quinlan

In this proxy statement these five directors are referred to individually as an “Independent Director” and collectively as the “Independent Directors.”

11

The Board of Directors has also determined that each member of the three committees of the Board currently meets the independence requirements applicable to those committees prescribed by the NASD, the Securities and Exchange Commission (“SEC”) and the Internal Revenue Service. The Board of Directors has further determined that Chet Borgida and Leonard DeCecchis, members of the Audit Committee of the Board of Directors, are “audit committee financial experts” as such term is defined in Item 401(h) of Regulation S-K promulgated by the SEC.

Presiding Director

Each March, the Independent Directors select from their group an Independent Director to preside as a Lead Director at all meetings of the Independent Directors. Mr. Quinlan currently serves as presiding Lead Director. The Independent Directors meet in executive session at each Board meeting.

Meetings of the Board of Directors

During 2006, the board of directors met four times. All of the directors attended each meeting.

Non-employee Director Meetings

Pursuant to the Company’s Corporate Governance Policies, non-employee directors may meet in non-employee director or committee sessions at the discretion of the non-employee directors. If any non-employee directors are not independent, then the independent directors shall schedule an independent director session at least once per year. The chair of the Audit, Compensation or Corporate Governance Committee leads non-employee board and committee sessions and the independent director sessions and is chosen by the non-employee directors and independent directors, respectively, based on who is the most knowledgeable and appropriate leader given the subject of the meeting. The session leader can retain independent consultants and schedule meetings. The non-employee directors met four times in 2006.

Compensation of Directors

Directors who are also employees of Warren receive no additional compensation for their services as directors. During 2006, each non-employee director received:

·upon becoming a member of the Board, options to purchase 10,000 shares of our common stock exercisable at the then current fair market price for a period of five years;

·an annual grant of options to purchase 5,000 shares of our common stock exercisable at the then current fair market price for a period of five years;

·annual retainer fee of $20,000 and reimbursement for travel expenses and other out-of-pocket costs incurred in connection with attending Board and committee meetings;

·annual retainer fee of $7,500 for the chairman of the audit committee and $5,000 for the chairman of the corporate governance and compensation committee; and

·$2,000 for each Board meeting attended, $1,500 for each audit committee meeting attended and $1,000 for each corporate governance and compensation committee meeting attended.

The annual retainer fee has been raised to $27,500 for 2007.

12

The following table sets forth the total compensation paid to each Director who is not an officer during 2006.

Name	Fees Paid in Cash			Stock Option Awards(1)			Total
Chet Borgida		$	59,000		$	7,187	$	66,187
Anthony Coelho		46,500			$	7,187	$	53,687
Dominick D’Alleva		40,500			$	7,187	$	47,687
Len DeCecchis		47,500			$	7,187	$	54,687
Marshall R. Miller(2)		46,000			$	7,187	$	53,187
Thomas Noonan		35,500			$	7,187	$	42,687
Michael R. Quinlan		42,500			$	7,187	$	49,687

(1)On March 23, 2006, each non-management director was awarded 5,000 stock options exercisable at $13.85 per share for five years, vesting 1/3rd one year from grant, 1/3rd two years from grant and 1/3rd three years from grant. Reflects grant date fair values computed in accordance with the Statement of Financial Accounting Standards No. 123R on the date of grant.

(2)Former Director who resigned in December 2006.

13

SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of March 30, 2007, there were 54,178,336 shares of Warren common stock outstanding entitled to vote at the meeting. Each of these shares is entitled to one vote. The information provided below summarizes the beneficial ownership of officers and directors of the Company and owners of more than 5% of outstanding common stock. “Beneficial ownership” generally includes those shares of common stock someone has the power to vote, sell or acquire within 60 days. It includes common stock that is held directly and also shares held indirectly through a relationship, a position as a trustee or under a contract or understanding.

Directors and Executive Officers

As of March 30, 2007, the directors and executive officers of the Company beneficially owned, in the aggregate, 4,098,051 shares of Warren common stock (approximately 7.6% of the outstanding shares entitled to vote at that time).

Name of Beneficial Owner	Shares of Common Stock Beneficially Owned		Percent of Ownership
Norman F. Swanton(1)(2)		2,640,644		5.0
Timothy A. Larkin(2)		477,417		*
Lloyd G. Davies(2)		110,000		*
Kenneth Gobble(2)		140,000		*
David E. Fleming(2)		91,667		*
Stewart P. Skelly(2)		100,044		*
Dominick D’Alleva(2)		82,188		*
Chet Borgida(2)		44,667		*
Anthony L. Coelho(2)		88,367		*
Leonard DeCecchis(2)		51,667		*
Thomas G. Noonan(2)		25,300		*
Michael R. Quinlan(2)		246,090		*
All directors and executive officers as a group (13 persons)		4,098,051		7.6	%

*Less than one percent.

(1)Includes 81,250 shares owned by a charitable foundation for which Mr. Swanton is a trustee.

(2)Excludes certain stock options exercisable at $13.85 per share for five years granted on March 23, 2006, which vest 1/3rd on March 23, 2008 and 1/3rd on March 23, 2009. The amount of unvested options that were granted to the referenced persons on March 23, 2006 are: 66,666 for Norman F. Swanton; 33,333 for Timothy A. Larkin; 20,000 for Lloyd G. Davies; 20,000 for Kenneth Gobble; 20,000 for Stewart Skelly; 13,333 for David E. Fleming; 13,333 for Ellis G. Vickers and 3,333 for each of Chet Borgida, Dominick D’Alleva, Leonard DeCecchis, Anthony Coelho, Thomas Noonan and Michael R. Quinlan. Also, excludes stock options granted on March 9, 2007 exercisable at $10.51 per share for five years and restricted stock grants, which all vest 1/3rd on March 9, 2008; 1/3rd on March 9, 2009 and 1/3rd on March 9, 2010. The amount of unvested options that were granted to the referenced persons on March 9, 2007 are: 5,000 for each of Chet Borgida, Dominick D’Alleva, Leonard DeCecchis, Anthony Coelho, Thomas Noonan and Michael R. Quinlan, and 150,000 stock options for Mr. Swanton; 37,500 stock options and 13,888 shares of restricted stock for Mr. Larkin; 40,000 stock options for Mr. Gobble; 40,000 stock options for Mr. Davies; 14,814 shares of restricted stock for Mr. Fleming, 14,814 shares of restricted stock for Mr. Skelly, and 9,259 shares of restricted stock for Mr. Vickers.

14

Owners of More than Five Percent of Warren Resources Stock

The following table shows the beneficial owners of more than five percent of the Company’s common stock based on information received as of March 15, 2007.

Name of Beneficial Owner	Shares of Common Stock Beneficially Owned		Percent of Ownership
NWQ Investment Management Company, LLC(1)		10,962,136		20.2	%
Neuberger Berman Inc.(2)		6,163,331		11.4
Capital Research & Management Co.(3)		3,921,700		7.2
Jennison Associates, LLC(4)		3,226,900		6.0
Daruma Management(5)		2,724,500		5.0
Norman F. Swanton(6)		2,707,311		5.0
Total		29,705,878		55.1	%

(1)In its Schedule 13G/A filed March 14, 2007 with the SEC with respect to its securities as of March 14, 2007, NWQ Investment Management, LLC , has its principal office at 2049 Century Park East, 16th Floor, Los Angeles, CA 90067. NWQ Investment Management states that it has sole voting power as to 9,786,213 shares and sole dispositive power as to 10,962,136 shares.

(2)In its Schedule 13G/A filed January 9, 2007 with the SEC with respect to its securities as of December 31, 2006, Neuberger Berman Inc., has its principal office at 605 Third Avenue, New York, NY 10158. Neuberger Berman states that it has sole voting power as to 4,999,831 shares, and shared dispositive power as to 6,163,331 shares.

(3)In its Schedule 13G filed February 12, 2007 with the SEC with respect to its securities as of December 31, 2006, Capital Research & Management Co., has its principal office at 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. Capital Research states that it has sole voting power as to 3,921,700 shares and sole dispositive power as to 3,921,700 shares.

(4)In its Schedule 13G filed February 14, 2007 with the SEC with respect to its securities as of December 31, 2006, Jennison Associates, LLC., has its principal office at 466 Lexington Avenue, New York, NY 10017. Jennison Associates states that it has sole voting power as to 3,226,900 shares, and sole dispositive power as to 3,226,900 shares.

(5)In its Schedule 13G filed February 13, 2007 with the SEC with respect to its securities as of December 31, 2006, Daruma Asset Management, Inc., has its principal office at 80 West 40th Street, 9th Floor, New York, NY 10018. Daruma Asset Management states that it has sole investment discretion as to 2,724,500 shares, sole voting power as to 1,064,500 shares.

(6)See information under “Directors and Officers” of this section above.

15

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The following discussion and analysis of compensation arrangements of our named executive officers for 2006 should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.

Compensation Philosophy

Our overall compensation philosophy is to provide a compensation package that enables us to attract, retain and motivate named executive officers (“NEOs”) to achieve our short-term and long-term business goals. Consistent with this philosophy, the following goals provide a framework for our NEO compensation program:

·Pay competitively to attract, retain and motivate NEOs who must operate in a high demand environment;

·Relate total compensation for each NEO to overall Company performance as well as individual performance;

·Aggregate the elements of total compensation to reflect competitive market requirements and to address strategic business needs;

·Expose a significant portion of each NEO’s compensation to risk, the degree of which will positively correlate to the level of the NEO’s responsibility and performance; and

·Align the interests of our NEOs with those of our stockholders.

Compensation Program

In order to achieve these goals, the elements of our total compensation packages include base salary and annual bonus, all paid in cash, as well as long-term compensation in the form of stock options or restricted common stock. We believe that appropriately balancing the total compensation package and ensuring the viability of each element of the package is necessary in order to provide market-competitive compensation. The costs of our compensation programs are a significant determinant of our competitiveness. Accordingly, we are focused on ensuring that the balance of the various components of our compensation program is optimized to motivate employees to improve our results on a cost-effective basis.

Review of External Data

Each year, we survey the compensation practices of our peers in the United States in order to assess our competitiveness. In August 2005, Mercer Consulting, Inc., a compensation consultant, prepared an analysis and report for the Compensation Committee, which analyzed data from oil and gas exploration and production companies in our size and market capitalization range (the “E&P Peer Group”).

For NEOs in fiscal year ended December 31, 2006, we generally targeted the aggregate value of our total cash compensation (base salary and bonus) for our senior management at the 50th to 75th percentile of the E&P Peer Group. We strongly believe in engaging the best talent in critical functions, and this may entail negotiations with individual executives who may have significant retention packages in place with other employers. In order to attract such individuals to our Company, we may determine that it is in our best interests to negotiate packages that deviate from the general principle of targeting total compensation

16

at the fiftieth percentile of our E&P Peer Group. Similarly, we may determine to provide compensation outside of the normal cycle to individuals to address retention issues.

For fiscal year ended December 31, 2006, we retained Mercer Consulting in August 2005 to conduct assessments in three areas of compensation: (1) total direct compensation (base salary) for our NEOs; (2) target total cash compensation (salary and bonus); and (3) equity (stock option grants). Mercer Consulting analyzed compensation for most executive positions of the E&P Peer Group. We based the compensation levels during 2006 on the data from the E&P Peer Group.

Compensation Elements

Cash Compensation

Base Salary

Base salary is primarily determined by competitive pay and individual job performance. Base salaries for NEOs are reviewed annually, or more frequently should there be significant changes in responsibilities. In each case, we take into account the results achieved by the NEO, his or her future potential, scope of responsibilities and experience, and competitive salary practices. Approved increases in base salary were effective February 2006. The Company’s performance in fiscal 2005 was a reflection, to a certain extent, on our Chief Executive Officer’s (“CEO”) individual performance. After reviewing our CEO’s 2005 performance in January 2006, the Compensation Committee decided to increase our CEO’s base salary by approximately 7.5%, placing his salary in the 50th to 75th percentile of the E&P Peer Group according to Mercer Consulting.

We believe our increase of our CEO’s salary was justified given our Company’s exceptional performance during his tenure. During fiscal year ended December 31, 2005, our revenue increased by approximately 51%, and our fiscal 2005 loss decreased by approximately 46% from fiscal 2004.

The NEOs received base salary increases as follows based on the individual NEO’s performance and a review of the Company’s peers:

·Mr. Larkin’s base salary was increased by 7.5%, which placed his salary in the 50th to 75th percentile of the E&P Peer Group.

·Mr. Gobble’s base salary was increased by 14.7%, which placed his salary in the 50th to 75th percentile of the E&P Peer Group.

·Mr. Davies’ base salary was increased by 5%, which placed his salary in the 50th to 75th percentile of the E&P Peer Group.

·Mr. Fleming’s base salary was increased by 3.6%, which placed his salary in the 50th to 75th percentile of the E&P Peer Group.

The range of this distribution reflects positioning and particular individual performance. Although the range in base pay adjustments is fairly broad, the final base salaries for the NEOs are within a reasonable range of the 60th percentile of the E&P Peer Group, which is the Committee’s target for the NEOs considering the comparatively higher cost-of-living and state taxation in the city and state where Warren is headquartered.

Bonuses

Our annual cash bonus plan is designed to reward and retain employees for achieving financial and operating goals that are key to the success of our business and aligned with the near and long term interests of our Company and our shareholders. Management sets bonus targets for each eligible employee as a percentage of base salary based on their position. At the beginning of each fiscal year, the

17

Compensation Committee, working with management, will set oil and gas production and operating income goals for our Company. Generally goals are set at above prior year results and budgeted levels. Each NEO’s bonus will be based upon their individual performance and contribution.

In February 2006, the Compensation Committee approved internal operational, financial and safety measures including a minimum level of performance above which bonuses begin to accrue, a target level of performance required to earn the target bonus payout and the respective weightings for each measure.

The calculations for the bonus payouts for 2006 considered:

·increases in oil and gas production volume growth;

·increases in proved reserves;

·increases in net operating income and

·reductions in operating expenses and other factors.

During the fiscal year ended December 31, 2006, the bonus targets for our NEOs were as follows:  150% of base salary for the CEO; 100% of base salary for the CFO; 75% of base salary for other Executive Vice Presidents (EVPs) and between 30% and 50% of base salary for Senior Vice Presidents (SVPs) and Vice Presidents (VPs). Each year, the bonus and commissions structure is reviewed to ensure that the design and payment structure is consistent with our compensation philosophy and competitive with our designated E&P Peer Group.

During fiscal 2006, we did not exceed a majority of our goals. As a result, the incentive bonus pool for 2006 which was paid in 2007 was $0.5 million. This compares to the 2005 bonus pool of $1.0 million which was paid in 2006. The cash bonus amount for each NEO shown in the Summary Compensation table below is a reflection of the success or lack thereof in achieving our corporate goals.

Please refer to the Non-Equity Incentive Compensation Plan Compensation column under the Summary Compensation Table below for actual cash bonus amounts earned in fiscal year ended 2006.

Total Cash Compensation

As reflected in the Summary Compensation Table below, the total cash compensation for Mr. Swanton, Mr. Larkin, Mr. Gobble and Mr. Fleming is between the 50th and 75th percentile of the E&P Peer Group and the total cash compensation for Mr. Davies is between the 25th and 50th percentile of the E&P Peer Group.

Long-term Compensation

Stock options

Based on our compensation philosophy, a substantial portion of our compensation program rewards the long-term performance of our Company, and the retention of NEOs. Long-term compensation is delivered to our NEOs through stock options granted upon their initial hire, and through ongoing annual grants. Similar to base salary increases, option grants are also granted to reflect promotions and significant changes in responsibility. Although the expense of stock options affects our financial statements negatively, we continue to believe that this is an important element of compensation that forces NEOs to focus on our long-term financial and operational performance, and forces NEOs to work toward the creation of stockholder value. In order to provide an incentive for continued employment, stock options granted under the Stock Option Plans are “time-based,” and generally 1/3rd vest one year after grant, 1/3rd after two years after grant and 1/3rd after three years after grant. Stock option grants generally expire five years from the date of the grant. This schedule provides a reasonable time frame to align each NEO’s compensation with the appreciation of the Company’s stock price, while managing potential dilution effectively.

18

Initial stock option grants and annual option grants for plan participants are generally determined within ranges established for each job level. These ranges are established based on our desire to position compensation levels relative to the competitive market. Specific recruitment needs are taken into account for establishing the levels of initial option grants. Annual option grants take into consideration a number of factors, including performance of the individual, job level, prior grants and competitive external levels. The goals of option grant guidelines are to ensure future grants remain competitive from a grant value perspective, and to ensure option usage consistent with option pool forecasts. The following table shows a comparison of the annual grants made during fiscal years ended 2006 and 2005:

	Annual Grant
NEO	2006	2005
Norman F. Swanton	100,000	250,000
Timothy A. Larkin	50,000	125,000
Lloyd G. Davies	30,000	20,000
Kenneth Gobble	30,000	50,000
David E. Fleming	20,000	50,000

Option grant practice

The Compensation Committee has provided the CEO with the authority to make initial option grants to new employees (within an approved range). During 2007, initial hire grants that were within the CEO’s approved range were granted on the employee’s start date. Based on the definition of “fair market value” in our Stock Option Plan, options are granted at 100% of the closing sales price of our stock on the last market trading date prior to the grant date.

For annual option grants to all employees, the Compensation Committee reviews and approves recommendations from the CEO. These grants are usually granted in March after our annual report on Form 10-K is filed with the SEC. In 2006, these grants were made on March 23, 2006. Beginning in 2007, annual grants will be made on the second business day after our previous year earnings release and our annual report on Form 10-K is filed with the SEC or the next trading day. This timing enables management and the Compensation Committee to consider performance by both the Company and the individual, and to balance such performance against our expectations for the current year. This timing also ensures that all current financial and operating information is made publicly available before any grants are made. We do not time the granting of our options with any favorable or unfavorable news released by the Company. The initial grants are based on the date of hiring of our new employees.

Restricted Stock

Restricted stock provides NEOs an opportunity to receive shares of Company stock provided they remain employed with the Company for a set period of time. Awards of restricted stock provide a valuable retention element to the overall compensation package for our NEOs. As with stock options, restricted stock awards provide a stock ownership vehicle and direct link to shareholder value creation since the value of the award can fluctuate up or down with changes in the Company’s stock price. Restricted stock awards typically vest equally over three years from the date of grant. NEOs receive any dividends on the shares and also have voting rights. Generally, an NEO will forfeit any unvested restricted shares if the NEO terminates voluntarily or is terminated for cause prior to the vesting date.

Role and Processes of the Compensation Committee

Our executive compensation program is administered by the Compensation Committee of the Board of Directors. The members of this Committee are Anthony Coelho, Chairman, Chet Borgida and

19

Dominick D’Alleva, each an independent, non-employee director. In 2006, the Compensation Committee met twice and all members of the Compensation Committee were present during those meetings.

Under the terms of its Charter, the Compensation Committee is responsible for recommending to the Board of Directors the type and level of compensation to be granted to our executive officers. In fulfilling its role, the Compensation Committee:

·grants stock options under the Stock Option Plans,

·recommends to the Board the compensation levels, including annual salary, bonus and stock options, for executives and other employees, as necessary, and

·reviews on a periodic basis the operation and administration of our executive compensation programs.

We offer our executives annual base salaries, annual cash incentive compensation, long-term incentive compensation and other employee benefits that are intended to be competitive with those offered at similar oil and gas exploration and production companies with comparable market capitalization, assets and sales. We review compensation paid at these companies because their size and business make them most comparable to us. We also believe these companies likely compete with us for executive talent. We engage a compensation consultant to identify annually the median compensation paid to executives holding equivalent positions or having similar responsibilities at these companies. These companies change from time to time. We may also use general compensation surveys sponsored by nationally recognized compensation consulting firms to assist us in making compensation decisions.

During 2006, the Compensation Committee and the Company relied on compensation information produced by a consulting firm retained by management in August 2005. The Committee and the Company engaged Mercer Consulting to provide us with median compensation information for 17 of these peer companies. We generally benchmark the compensation that we pay to our executives against the median compensation that those 17 companies pay to their executives. We benchmark against median compensation because it allows us to attract and retain employees, provides an incentive for employees to strive for better than average performance to earn better than average compensation, and helps us to manage the overall cost of our compensation program. The compensation information provided by the consultant includes median base salary, annual cash incentive compensation, long-term incentive compensation and total direct compensation. Total direct compensation is the sum of base salary, annual cash incentive compensation and long-term incentive compensation. These peer companies included:

Swift Energy Corp.	Brigham Exploration Co.
Comstock Resources, Inc.	Goodrich Petroleum Corp.
Remington Oil &Gas Corp.	McMoran Exploration Co.
Energy Partners, Ltd.	Callon Petroleum Corp.
KCS Energy Inc.	Carrizo Oil & Gas, Inc.
Delta Petroleum Corp.	Clayton Williams Energy, Inc.
Petroleum Development Corp.	Edge Petroleum Corp.
Resource America, Inc.	Mission Resources Corp.
Meridian Resource Corp.

The Compensation Committee received the compensation recommendations from the chief executive officer (CEO), relevant background information on our executives and officers and compensation studies conducted by Mercer Consulting. The Compensation Committee then reviewed the compensation recommendation with the CEO for all executives, except for the CEO. The CEO was not present during the discussion of his compensation.

20

Commencing in 2007, the Compensation Committee has delegated the authority to make initial option grants to new employees (within an approved range) to the CEO within a pre-approved compensation matrix. All new employee grants in excess of the CEO limit, subsequent grants to existing employees and any grant to executives are approved by the Compensation Committee.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

Summary Compensation Table

The following Summary Compensation Table (SCT) sets forth summary information concerning the compensation earned by our NEOs for the fiscal year ended December 31, 2006 for services to our Company in all capacities.

Name and Principal Position	Year	Salary		Bonus(1)		Option Awards(2)		All Other Compensation(3)			Total ($)
Norman F. Swanton	2006	$	537,500	$	181,675	$	143,748		$	24,686	$	887,609
Chief Executive Officer and Chairman of the Board
Timothy A. Larkin	2006	$	295,625	$	81,297	$	71,874		$	10,122	$	458,918
Executive Vice President and Chief Financial Officer
Lloyd G. Davies	2006	$	262,500	$	34,388	$	43,124		$	7,892	$	347,904
Executive Vice President and Chairman & CEO of Warren E&P Inc.
Kenneth Gobble	2006	$	235,000	$	33,135	$	43,124		$	10,754	$	322,013
Senior Vice President and President of Warren E&P Inc.
David E. Fleming	2006	$	274,540	$	24,160	$	28,750		$	11,425	$	338,875
Senior Vice President, General Counsel and Secretary

(1)Bonus amounts paid to NEOs for 2006 include bonuses earned for the fiscal year ended December 31, 2006 and actually paid in the first quarter of 2007. Total bonuses paid to all employees of the Company were $0.5 million.

(2)Reflects the fair value at grant date computed in accordance with the Statement of Financial Accounting Standards No. 123R.

(3)Amounts reflect 401(k) matching contribution of approximately $8,400 paid to the retirement account of each NEO and insurance premiums paid by the Company during the covered fiscal year with respect to life insurance for the benefit of the NEO or his designee.

21

Grants of Plan-based Awards Table for 2006

			Estimated Future Payouts Under Non- Equity Incentive Plan Awards		All Other Option Awards:
Name	Grant Date		Target ($)		Number of Securities Underlying Options #		Exercise Price of Options ($/Sh)			Grant Date Fair Value of Option Awards(1)
Norman F. Swanton		3/23/06		—		100,000		$	13.85		$	143,784
Timothy A. Larkin		3/23/06		—		50,000		13.85			$	71,874
Lloyd G. Davies		3/23/06		—		30,000		13.85			$	43,124
Kenneth Gobble		3/23/06		—		30,000		13.85			$	43,124
David E. Fleming		3/23/06		—		20,000		13.85			$	28,750

(1)Reflects the fair value at grant date computed in accordance with the Statement of Financial Accounting Standards No. 123R.

At their discretion, the Compensation Committee has the authority to pay any NEO in excess of or below their targeted bonus amount. The goals for 2006 were approved by the Compensation Committee in February 2006. The payout amounts for each NEO were reviewed and approved by the Compensation Committee and the Board of Directors in February 2007 upon completion of the consolidated financial statements for fiscal 2006.

As mentioned in the CD&A, we grant stock options to new employees. Following the initial hire, additional grants are made to participants pursuant to a periodic annual grant program or following a significant change in job responsibilities, scope or title. For 2006, all grants to NEOs are the annual grants. According to the stock option plans, fair market value that is used to determine the exercise price for option grants is defined as the NASDAQ closing price of the Company’s stock on the market trading of the grant date. Options granted to NEOs during fiscal 2006 expire 5 years from the date of grant and vest 1/3rd after one year, 1/3rd after two years and 1/3rd after three years.

We adopted SFAS 123(R) on January 1, 2006, see Note A under Item 8 of the 2006 Annual Report on Form 10-K. The grant date fair value of the option awards is calculated using the Black-Scholes valuation model using the following assumptions:

Assumptions	Rate
Average risk free interest rate		4.7	%
Average expected term (years)		3.5
Average expected volatility		47	%

Employment Arrangements

We have entered into employment agreements with Messrs. Swanton, Larkin, Davies and Fleming. In addition to the specific provisions of each employment agreement as described below, each of these employment agreements provides that if the executive’s employment is terminated without cause, due to death or disability or for “good reason”, including a change of control, all unvested stock options granted to the executive shall be kept in effect and not terminated.

Norman F. Swanton.   We entered into an employment agreement effective January 1, 2001, as amended and effective January 1, 2006, with Norman F. Swanton, our president, chief executive officer and chairman. This agreement that provides for a base salary of $537,500 per year, subject to annual cost of living adjustments, participation in our standard insurance plans for our executives, and participation in our other incentive compensation programs at the discretion of the Board of Directors. Under his agreement, if Mr. Swanton’s employment is terminated without cause and he executes a full and general

22

release in favor of, and satisfactory to the Company, Mr. Swanton will be entitled to termination compensation equal to the greater of two years’ annual base salary, or all of the base salary for the remainder of his employment term. Additionally, if terminated without cause or there is a “change in control” of Warren (as defined in the agreement), all unvested stock options and restricted common stock become immediately vested. Mr. Swanton’s employment agreement automatically renews for an additional year on each anniversary of the effective date of the amended agreement, unless we notify Mr. Swanton or he notifies us in writing 90 days prior to such anniversary that we, or he, is not renewing his employment agreement. No such notice of non-renewal has been presented by either party. Accordingly, Mr. Swanton’s employment agreement has been renewed through December 31, 2007. As a result of the annual cost of living adjustment over the prior year, his base salary for 2007 is $555,316.

Timothy A. Larkin.   We entered into an employment agreement effective January 1, 2001, as amended and effective January 1, 2006, with Timothy A. Larkin, our executive vice president and chief financial officer. This agreement provides for a base salary of $295,625 per year, subject to annual cost of living adjustments, participation in our standard insurance plans for our executives, and participation in our other incentive compensation programs at the discretion of the Board of Directors. Under his agreement, if Mr. Larkin’s employment is terminated without cause and he executes a full and general release in favor of, and satisfactory to, the Company, Mr. Larkin will be entitled to termination compensation equal to the greater of two years’ annual base salary, or all of the base salary for the remainder of the employment term. Additionally, if terminated without cause or there is a “change in control”, all unvested stock options and restricted common stock become immediately vested. Mr. Larkin’s employment agreement automatically renews for an additional year on each anniversary of the effective date of the amended agreement, unless we notify Mr. Larkin or he notifies us in writing 90 days prior to such anniversary that we, or he, will not be renewing his employment agreement. No such notice of non-renewal has been presented by either party. Accordingly, Mr. Larkin’s employment agreement has been renewed through December 31, 2007. As a result of the annual cost of living adjustment over the prior year, his base salary for 2007 is $305,424.

Lloyd G. Davies.   We entered into an employment agreement effective March 1, 2006 with Lloyd G. Davies, our executive vice president and the chairman and chief executive officer of Warren E&P, Inc. This agreement provides for a base salary of $262,500 per year, participation in our standard insurance plans for our executives, and participation in our other incentive compensation programs at the discretion of the Board of Directors. Under his agreement, if Mr. Davies’ employment is terminated without cause and he executes a full and general release in favor of, and satisfactory to, the Company, Mr. Davies will be entitled to termination compensation equal to the greater of three month’s base salary or all of the base salary for the remainder of the employment term. Additionally, if terminated without cause or there is a “change in control”, all unvested stock options and restricted common stock become immediately vested. Mr. Davies’ employment agreement expires on December 31, 2006, but will automatically renew on each anniversary of the effective date for an additional year unless we notify Mr. Davies or he notifies us in writing 90 days prior to such anniversary that we, or he, will not be renewing his employment agreement. No such notice of non-renewal has been presented by either party. Accordingly, such employment agreement has been renewed through December 31, 2007. As a result of the annual cost of living adjustment over the prior year, his base salary for 2007 is $268,990.

David E. Fleming.   We entered into an employment agreement effective February 1, 2006 with David E. Fleming, our senior vice president, general counsel and corporate secretary. This agreement provides for a base salary of $274,540 per year, participation in our standard insurance plans for our executives, and participation in our other incentive compensation programs at the discretion of the Board of Directors. Under his agreement, if Mr. Fleming’s employment is terminated without cause and he executes a full and general release in favor of, and satisfactory to, the Company, Mr. Fleming will be entitled to termination compensation equal to the greater of three month’s base salary or all of the base salary for the remainder of the employment term. Additionally, if terminated without cause or there is a “change in control”, all

23

unvested stock options and restricted common stock become immediately vested. Mr. Fleming’s employment agreement expired on December 31, 2006, but will automatically renew for an additional year on each anniversary of the effective date, unless we notify Mr. Fleming or he notifies us in writing 90 days prior to such anniversary that we, or he, will not be renewing his employment agreement. No such notice of non-renewal has been presented by either party. Accordingly, such employment agreement has been renewed through December 31, 2007. As a result of the annual cost of living adjustment over the prior year, his base salary for 2007 is $283,640.

Outstanding Equity Awards as of December 31, 2006

The following table summarizes the vested and unvested stock options outstanding as of December 31, 2006:

Name	# of Securities Underlying Unexercised Options (# Exercisable)(1)		# of Securities Underlying Unexercised Options (# Unexercisable)		Option Exercise Price ($/sh)			Option Expiration Date
Norman F. Swanton		300,000		300,000		$	4.00		5/20/08
		200,000		200,000		7.00			3/30/09
		250,000		250,000		9.05			2/7/10
		100,000		100,000		13.85			3/23/11
Timothy A. Larkin		185,750		185,750		4.00			5/20/08
		100,000		100,000		7.00			3/30/09
		125,000		125,000		9.05			2/7/10
		50,000		50,000		13.85			3/23/11
Lloyd G. Davies		20,000		20,000		4.00			5/20/08
		60,000		60,000		7.00			3/30/09
		20,000		20,000		9.05			2/7/10
		30,000		30,000		13.85			3/23/11
Kenneth Gobble		40,000		40,000		4.00			5/20/08
		40,000		40,000		7.00			3/30/09
		50,000		50,000		9.05			2/7/10
		30,000		30,000		13.85			3/23/11
David E. Fleming		1,000		1,000		4.00			5/20/08
		24,000		24,000		7.00			3/30/09
		50,000		50,000		9.05			2/7/10
		20,000		20,000		13.85			3/23/11

(1)Does not include annual stock option grants and shares of restricted stock granted on March 9, 2007 for certain eligible employees, all of which are unvested as follows: Mr. Swanton—150,000 stock options; Mr. Larkin—37,500 stock options and 13,888 shares of restricted stock; Mr. Gobble—40,000 stock options; Mr. Davies—40,000 stock options; and Mr. Fleming—14,814 shares of restricted stock. All of these stock options and shares of restricted stock vest 1/3rd after one year from date of grant, 1/3rd after two years ands 1/3rd after three years. These grants were for performance in 2006. In the event of a “change in control” of Warren (as defined in the stock option awards), all of these unvested stock options and restricted common stock awards become immediately vested.

24

Options Exercises During Fiscal 2006

The following table summarizes the options exercised by the NEO’s during the year ended December 31, 2006 and the value realized upon exercise:

	Option Awards
Name	Number of Shares Acquired on Exercise		Value Realized Upon Exercise ($)
Lloyd G. Davies		25,000		$	104,000
David E. Fleming		35,000		$	353,280

Severance Agreements

Under their Employment Agreements, if the Board of Directors terminates Mr. Swanton or Mr. Larkin other than for “cause” (which includes gross negligence, willful misconduct, fraud and certain criminal convictions) or if Mr. Swanton or Mr. Larkin terminates his employment for “good reason” (which includes relocation or a reduction in duties, title or compensation and benefits, death or permanent disability), Mr. Swanton and Mr. Larkin are entitled to severance pay equal to two-years of their then-current base salary, and the most recent years’ incentive bonus. All of the other NEOs receive three months of their base salary as severance payments if terminated other than for “cause” or the NEO terminate his employment for “good reason.”

Based on a hypothetical termination date of December 31, 2006, the cash severance payments for five NEOs would have been as follows:

Name	Salary-based		Bonus-based			Severance Total ($)
Norman F. Swanton	$	1,075,000		$	300,000	$	1,375,000
Timothy A. Larkin	$	591,250		$	110,000	$	701,250
Kenneth Gobble	$	58,750		—		$	58,750
Lloyd G. Davies	$	65,625		—		$	65,625
David E. Fleming	$	68,635		—		$	68,635

Compensation Committee Interlocks and Insider Participation

During 2006, the Compensation Committee consisted of Anthony Coelho, Chairman, Chet Borgida, Dominick D’Alleva. None of these individuals served as one of the Company’s officers or employees at any time. None of the Company’s executive officers serve as a member of the compensation committee of any other company that has an executive officer serving as a member of the Board of Directors. None of the Company’s executive officers serve as a member of the board of directors of any other company that has an executive officer serving as a member of the Board’s Compensation Committee.

Compensation Committee Report

In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed the Compensation Discussion and Analysis required by Regulation S-K Item 402(b) issued by the SEC with the CEO and Chief Financial Officer of the Company. In reliance on these reviews and discussions, the Compensation Committee recommended to the board of directors (and the board approved) that the Compensation Discussion and Analysis be included in this proxy statement for the Corporation’s 2007 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission.

Respectfully Submitted,

THE COMPENSATION COMMITTEE

Anthony Coelho, Chairman

Chet Borgida

Dominick D’Alleva

25

Director and Officer Indemnification Agreements

The Company has entered into indemnification agreements with its directors and certain executive officers, in part to enable the Company to attract and retain qualified directors and executive officers. These agreements require the Company, among other things, to indemnify such persons against certain liabilities that may arise by reason of their status or service as directors or officers, to advance their expenses for proceedings for which they may be indemnified and to cover such person under any directors’ and officers’ liability insurance policy the Company may maintain from time to time. These agreements are intended to provide indemnification rights to the fullest extent permitted under applicable Maryland law and are in addition to any other rights the Company’s directors and executive officers may have under the Company’s restated certificate of incorporation, bylaws and applicable law.

Equity Compensation Plan Information

The following table provides information as of December 31, 2006, with respect to shares of our common stock that may be issued under our existing equity compensation plans, all of which have been approved by our Stockholders.

	Number of Shares Authorized for Issuance under plan		Number of securities to be issued upon exercise of outstanding options		Weighted-average exercise price of outstanding options			Number of securities remaining available for future issuance under equity compensation plans
2000 Equity Incentive Plan		1,975,000		765,250		$	10.83		584,250
2001 Stock Incentive Plan		2,500,000		424,783		7.92			1,312,977
2001 Key Employee Stock Incentive Plan		2,500,000		1,266,750		6.46			1,008,250
Total		6,975,000		2,456,783		$	8.07		2,905,477

In the event that Warren or Warren E&P is acquired by merger, consolidation, asset sale or equity sale, outstanding options will be assumed, or equivalent options will be issued by the successor corporation. If the successor corporation refuses to assume or substitute the options, the compensation committee may accelerate the participants’ rights to exercise for a limited period of time after which the options would terminate. With respect to restricted stock awards, the compensation committee could also elect to terminate any vested awards in exchange for cash payments.

RELATED MATTERS

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the Common Stock, to file with the SEC initial reports of beneficial ownership (“Form 3”) and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company (“Form 4”). Executive officers, directors and greater than 10% Stockholders of the Company are required by SEC rules to furnish to the Company copies of all Section 16(a) reports that they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, the Company believes that all reporting obligations of the Company’s officers, directors and greater than ten percent stockholders under Section 16(a) were satisfied during the year ended December 31, 2006.

26

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

For 2006, the Company paid $340,717 to Mr. Bret Cook under a consulting agreement for drilling supervisory services in California. Mr. Cook is the brother-in-law of Mr. Kenneth Gobble, the Company’s Senior Vice President and the President of Warren E&P, Inc.

As of the current date, our officers and directors own, in the aggregate, limited partnership interests valued at $850,000 at the time of purchase in 4 of our drilling programs. Mr. Swanton owns $200,000 of interests in three programs. Mr. Quinlan owns $600,000 of interests in one program, representing 28.6% of that program. Other than Mr. Quinlan’s interest in that one drilling program, no officer or director owns greater than a 10% interest in any particular drilling program.

Our Audit Committee, pursuant to the Audit Committee Charter, has oversight for related person transaction and compliance with our Code of Ethics. The Audit Committee receives periodic reports from management with respect to related person transaction and reviews potential conflict of interest situations where appropriate. Our Code of Ethics governs related person transactions for our employees and requires potential conflicts of interest to be reported to management or the Company’s compliance team.

DEFERRED COMPENSATION PLAN

The Company maintains a Deferred Compensation Plan for directors. The Deferred Compensation Plan allows directors to defer receipt of up to 100% of their board and committee retainers and/or board and committee meeting fees. The Deferred Compensation Plan permits participants to allocate the deferred amounts among a group of notional accounts that mirror the gains and/or losses of various investment funds. In general, deferred amounts are distributed to the participant upon termination or at a specific date as elected by the participant.

Item 2—Ratification of Appointment of Independent Auditors

The Audit Committee has appointed Grant Thornton LLP to serve as independent auditors for the fiscal year ending December 31, 2007, subject to ratification of the appointment by the Stockholders. Grant Thornton LLP has served as the Company’s independent auditors for many years and is considered by management to be well qualified.

For many years, the Company has had an Audit Committee composed entirely of non-management directors. The members of the Audit Committee meet the independence and experience requirements of the Nasdaq Stock Market and the New York Stock Exchange. In 2006, the Committee met seven times. The Committee has adopted, and annually reviews, a charter outlining the practices it follows; a copy of the charter is attached as Appendix A to this proxy statement. The charter complies with all current regulatory requirements.

The following report of the Audit Committee of the Company shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall this report be incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Audit Committee Report

The Audit Committee is responsible for monitoring the integrity of the Company’s consolidated financial statements, the Company’s system of internal controls, the Company’s risk management, the qualifications and independence of the Company’s independent auditor, the performance of the Company’s internal and independent auditors and the Company’s compliance with legal and regulatory requirements. We have the sole authority and responsibility to select, determine the compensation of, evaluate and, when appropriate, replace the Company’s independent auditors. The Committee has three

27

independent directors and operates under a written charter adopted by the Board. The Board has determined that each Committee member is independent under the standards of director independence established under our Corporate Governance Policies and the Nasdaq Stock Market listing requirements and is also “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934.

Management is responsible for the financial reporting process, including the system of internal controls, for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and for the report on the Company’s internal control over financial reporting. The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America and for attesting to management’s report on the Company’s internal control over financial reporting. Our responsibility is to oversee and review the financial reporting process and to review and discuss management’s report on the Company’s internal control over financial reporting. We are not, however, professionally engaged in the practice of accounting or auditing and do not provide any expert or other special assurance as to such financial statements concerning compliance with laws, regulations or generally accepted accounting principles or as to auditor independence. We rely, without independent verification, on the information provided to us and on the representations made by management and the independent auditors.

We held seven meetings during 2006. The meetings were designed, among other things, to facilitate and encourage communication among the Committee, management and the Company’s independent auditors, Grant Thornton LLP. We discussed with Grant Thornton LLP the overall scope and plans for our audits. We met with Grant Thornton LLP, with and without management present, to discuss the results of their examination and their evaluation of the Company’s internal controls.

We reviewed and discussed the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002, including the Public Company Accounting Oversight Board’s (PCAOB) Auditing Standard No. 2 regarding the audit of internal control over financial reporting.

We reviewed and discussed the Company’s guidelines, policies and procedures for financial risk assessment and risk management and the major risk exposures of the Company and its business units, as appropriate. We reviewed and discussed with management its reports on risk management.

We reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2006 with management and Grant Thornton LLP. We also discussed with management and Grant Thornton LLP the process used to support certifications by the Company’s Chief Executive Officer and Chief Financial Officer that are required by the Securities and Exchange Commission and the Sarbanes-Oxley Act of 2002 to accompany the Company’s periodic filings with the Securities and Exchange Commission and the processes used to support management’s annual report on the Company’s internal controls over financial reporting.

We also discussed with Grant Thornton LLP matters that independent accounting firms must discuss with audit committees under generally accepted auditing standards and standards of the PCAOB, including, among other things, matters related to the conduct of the audit of the Company’s consolidated financial statements and the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication with Audit Committees).

Grant Thornton LLP also provided to the Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and represented that it is independent from the Company. We discussed with Grant Thornton their independence from the Company. When considering Grant Thornton LLP’s independence, we considered if services they provided to the Company beyond those rendered in connection with their audit of the Company’s consolidated financial statements, reviews of the Company’s interim condensed consolidated

28

financial statements included in its Quarterly Reports on Form 10-Q were compatible with maintaining their independence. We also reviewed, among other things, the audit, audit-related and tax services performed by, and the amount of fees paid for such services to, Grant Thornton LLP. We received regular updates on the amount of fees and scope of audit, audit-related and tax services provided.

Based on our review and these meetings, discussions and reports, and subject to the limitations on our role and responsibilities referred to above and in the Audit Committee Charter, we recommended to the Board that the Company’s audited consolidated financial statements for the year ended December 31, 2006 be included in the Company’s Annual Report on Form 10-K. We have also selected Grant Thornton LLP as the Company’s independent auditors for the year ended December 31, 2007 and are presenting the selection to the Stockholders for ratification.

Dated: April 11, 2007

/s/ Chet Borgida, Chairman

/s/ Dominick D’Alleva

/s/ Len DeCecchis

29

AUDIT FEES AND SERVICES

The following table sets forth the aggregate fees billed to the Company in each of the last two fiscal years by Grant Thornton LLP:

	2006		2005
Audit Fees	$	380,818	$	581,852
Audit Related Fees	35,880		–0–
Tax Fees(1)	29,500		28,640
All Other Fees	–0–		–0–
Totals	$	446,198	$	610,492

(1)Represents fees for assisting management in the preparation of the corporate tax return.

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the independent auditor. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.

Prior to engagement of the independent auditor, management submits an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval.

1.     Audit services include audit work performed in the annual audit of the financial statements, as well as work that generally only the independent auditor can reasonably be expected to provide, including quarterly reviews, consents and assistance with and review of documents filed with the SEC, comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.

2.     Audit-Related services are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

3.     Tax services include all services performed by the independent auditor’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance.

4.     Other Fees are those associated with services not captured in the other categories. The Company generally doesn’t request such services from the independent auditor.

Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted and the Audit Committee requires the independent auditor and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent auditor.

The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

For 2006 and 2005, 100% of the accounting fees and services were pre-approved by the Audit Committee.

30

Ratification of the appointment of the independent auditors requires the affirmative vote of a majority of the votes cast by the holders of the shares of Common Stock voting in person or by proxy at the Annual Meeting of Stockholders. If the Stockholders should not ratify the appointment of Grant Thornton LLP, the Audit Committee will reconsider the appointment.

The Board Of Directors Recommends A Vote

For

The Ratification Of The Appointment Of Grant Thornton LLP
As Independent Auditors.

EXPENSES OF SOLICITATION

We bear all expenses incurred in connection with the solicitation of proxies. We have engaged various firms to assist with the solicitation of proxies for estimated fees of $25,000 plus expenses.

We will reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to beneficial owners of Common Stock held in their names.

Our Directors, officers and employees may also solicit proxies by mail, telephone and personal contact. They will not receive any additional compensation for these activities.

PROPOSALS OF STOCKHOLDERS FOR 2008 ANNUAL MEETING

We must receive proposals of Stockholders on or before February 16, 2008 that are intended to be presented at the 2008 Annual Meeting of  Stockholders in order for the proposals to be eligible for inclusion in our 2007 proxy statement and proxy relating to that meeting. These proposals should be sent to the Secretary by fax to (212) 697-9466 or by mail to the Office of the Secretary, Warren Resources, Inc., 489 Fifth Avenue, 32nd Floor, New York, NY 10017 or by e-mail to dfleming@warrenresourcesinc.com.

According to our By-Laws, a proposal for action to be presented by any Stockholder at an Annual Meeting of Stockholders shall be out of order and shall not be acted upon unless:

·Specifically described in our notice to all Stockholders of the meeting and the matters to be acted upon thereat, or

·The proposal shall have been submitted in writing to the Secretary at the above fax number or mailing address or e-mail address and received at our principal executive offices prior to February 16, 2008, and such proposal is, under law, an appropriate subject for share-owner action.

HOUSEHOLDING

As permitted by the 1934 Act, only one copy of this proxy statement is being delivered to Stockholders residing at the same address, unless such Stockholders have notified the Company of their desire to receive multiple copies of the proxy statement.

The Company will promptly deliver, upon oral or written request, a separate copy of the proxy statement to any Stockholder residing at an address to which only one copy was mailed. Requests for additional copies should  be directed to Investor Relations, by phone (212) 697-9660 or by fax at (212) 697-9466 or by mail to Investor Relations, Warren Resources, Inc., 489 Fifth Avenue, 32nd Floor, New York, NY 10017 or by e-mail to info@warrenresourcesinc.com.

31

OTHER INFORMATION

Management does not know of any items, other than those referred to in the accompanying Notice of Annual Meeting of Stockholders, which may properly come before the meeting or other matters incident to the conduct of the meeting.

As to any other item or proposal that may properly come before the meeting, including voting on a proposal omitted from this proxy statement pursuant to the rules of the SEC, it is intended that proxies will be voted in accordance with the discretion of the proxy holders.

The form of proxy and this proxy statement have been approved by the Board of Directors and are being mailed and delivered to Stockholders by its authority.

ANNUAL REPORT TO STOCKHOLDERS AND FORM 10-K

The 2006 Annual Report (which is not a part of the Company’s proxy soliciting materials) is being mailed to the Company’s Stockholders with this Proxy Statement. The Company’s Annual Report on Form 10-K for year 2006 (the “2006 10-K”) and the exhibits filed with it are available at the Company’s web site at www.warrenresources.com. Upon request by any shareholder to the following address, a copy of the 2006 10-K, without exhibits, will be furnished without charge, and a copy of any or all exhibits to the 2006 10-K will be furnished for a fee which will not exceed the Company’s reasonable expenses in furnishing the exhibits:

Investor Relations
Warren Resources, Inc.
489 Fifth Avenue, 32nd Floor
New York, NY 10017

	By Order of the Board of Directors,
	/s/ David E. Fleming
	David E. Fleming,
	Corporate Secretary
New York, New York
April 11, 2007

32

APPENDIX A

AUDIT COMMITTEE CHARTER

Purpose

The Audit Committee is appointed by the Board to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent auditors, and (4) the compliance by the Company with legal and regulatory requirements.

The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the “Commission”) to be included in the Company’s annual proxy statement.

Committee Membership

The Audit Committee shall consist of no fewer than three members. The members of the Audit Committee shall meet the independence and experience requirements of the Nasdaq Stock Market , Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Commission. At least one member of the Audit Committee shall be a “financial expert” as defined by the Commission. Audit committee members shall not simultaneously serve on the audit committees of more than two other public companies.

The members of the Audit Committee shall be appointed by the Board on the recommendation of the Corporate Governance Committee. Audit Committee members may be replaced by the Board.

Meetings

The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. The Audit Committee shall meet periodically with management, the internal auditors and the independent auditor in separate executive sessions. The Audit Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

Committee Authority and Responsibilities

The Audit Committee shall have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Audit Committee. The Audit Committee shall preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to the completion of the audit.

The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant preapprovals shall be presented to the full Audit Committee at its next scheduled meeting.

The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee. The Audit Committee shall make regular reports to the Board. The Audit Committee shall

A-1

review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Audit Committee shall annually review the Audit Committee’s own performance.

The Audit Committee, to the extent it deems necessary or appropriate, shall:

Financial Statement and Disclosure Matters

1.     Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management’s discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K.

2.     Review and discuss with management and the independent auditor the Company’s quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor’s review of the quarterly financial statements.

3.     Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light of material control deficiencies.

4.     Review and discuss quarterly reports from the independent auditors on:

(a)All critical accounting policies and practices to be used.

(b)All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor.

(c)Other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.

5.     Discuss with management the Company’s earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made).

6.     Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements.

7.     Discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.

8.     Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

9.     Review disclosures made to the Audit Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.

Oversight of the Company’s Relationship with the Independent Auditor

10.   Review and evaluate the lead partner of the independent auditor team.

A-2

11.   Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, and taking into account the opinions of management and internal auditors. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.

12.   Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

13.   Recommend to the Board policies for the Company’s hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.

Oversight of the Company’s Internal Audit Function

14.   Review the appointment and replacement of the senior internal auditing executive.

15.   Review the significant reports to management prepared by the internal auditing department and management’s responses.

16.   Discuss with the independent auditor and management the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.

Compliance Oversight Responsibilities

17.   Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated.

18.   Obtain reports from management, the Company’s senior internal auditing executive and the independent auditor that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company’s Code of Conduct and Ethics. Review reports and disclosures of insider and affiliated party transactions. Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Conduct and Ethics.

19.   Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

20.   Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company’s financial statements or accounting policies.

Limitation of Audit Committee’s Role

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor.

A-3

ANNUAL MEETING OF STOCKHOLDERS OF

WARREN RESOURCES, INC.

May 16, 2007

COMMON STOCK

Please date, sign and mail

Your proxy card in the

envelope provided as soon

as possible.

Please detach and mail in the envelope provided.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x

ELECTION OF DIRECTORS

	NOMINEES:
FOR ALL NOMINEES	o   Anthony Coelho
	o   Dominick D’Alleva
	o   Espy Price
	o   James M. McConnell
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(see instructions below)

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the box next to each nominee you wish to withhold as shown here x

APPOINTMENT OF AUDITORS

For the ratification of the appointment of Grant Thornton LLP as the Company’s auditors for the year 2007:

FOR	AGAINST	FOR
Printed Name of Stockholder:
Number of Shares Owned:
Signature of Stockholder:			Date:
Signature of Stockholder:			Date:

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

WARREN RESOURCES, INC.

The undersigned hereby appoints Chet Borgida and Michael R. Quinlan, each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Warren Resources, Inc. Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held May 16, 2007 or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Meeting.

(Continued and to be marked, dated and signed, on the other side)

Address Change/Comments (Mark the corresponding box on the reverse side)