Warren Resources (WRES) 10-Q 4 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 04, 2015
Document and Entity Information
Entity Registrant Name	WARREN RESOURCES INC
Entity Central Index Key	892,986
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		81,203,466
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$ 15,359	$ 1,703
Accounts receivable-trade	8,385	20,025
Restricted investments in U.S. Treasury Bonds-available for sale, at fair value	144	142
Derivative financial instruments		4,005
Other current assets	2,963	1,245
Total current assets	26,851	27,120
Other Assets
Oil and gas properties-at cost, based on full cost method of accounting, net of accumulated depreciation, depletion and amortization and impairment (includes unproved properties excluded from amortization of $211,446 and $204,626 as of June 30, 2015 and December 31, 2014)	563,463	753,496
Property and equipment-at cost, net	19,016	19,622
Restricted investments in U.S. Treasury Bonds-available for sale, at fair value	1,291	1,280
Deferred debt offering costs, net	13,335	13,942
Other assets	3,002	3,220
Total other assets	600,107	791,560
Total assets	626,958	818,680
Current Liabilities
Current maturities of debentures and other long-term liabilities	381	381
Derivative financial instruments	408
Accounts payable and accruals	33,717	57,389
Total current liabilities	34,506	57,770
Long-Term Liabilities
First lien credit facility	219,665
Revolving loan credit facility		134,749
Other long-term liabilities, less current portion	37,334	36,084
Derivative Liabilities, Non-current	61
Senior notes and debentures, less current portion and discount	229,058	297,525
Total long-term liabilities	$ 486,118	$ 468,358
Commitments and Contingencies
Stockholders' Equity
8% convertible preferred stock, par value $.0001; authorized 10,000,000 shares, issued and outstanding, 10,703 shares in 2015 and 2014 (aggregate liquidation preference $128 in 2015 and 2014)	$ 128	$ 128
Common stock - $.0001 par value; authorized, 200,000,000 shares; issued 81,203,466 shares in 2015 and 80,754,225 shares in 2014	8	8
Additional paid-in-capital	514,186	512,843
Accumulated deficit	(408,190)	(220,643)
Accumulated other comprehensive income, net of applicable income taxes of $133 in 2015 and $141 in 2014	202	216
Total stockholders' equity	106,334	292,552
Total liabilities and stockholders' equity	$ 626,958	$ 818,680

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Oil and gas properties, unproved properties excluded from amortization (in dollars)	$ 211,446	$ 204,626
8% convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
8% convertible preferred stock, authorized shares	10,000,000	10,000,000
8% convertible preferred stock, issued shares	10,703	10,703
8% convertible preferred stock, outstanding shares	10,703	10,703
8% convertible preferred stock, aggregate liquidation preference (in dollars)	$ 128	$ 128
Preferred stock dividend rate (as a percent)	8.00%	8.00%
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares	200,000,000	200,000,000
Common stock, issued shares	81,203,466	80,754,225
Accumulated other comprehensive income, applicable income taxes (in dollars)	$ 133	$ 141

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Operating revenues
Oil and gas sales	$ 25,087	$ 33,572	$ 49,677	$ 66,451
Transportation revenue	1,130	1,422	2,318	2,745
Total revenues	26,217	34,994	51,995	69,196
Operating expenses
Lease operating expenses and taxes	12,870	9,208	25,378	18,710
Depreciation, depletion and amortization	19,240	10,535	36,432	20,889
Impairment	83,506		174,881
Transportation expenses	409	551	987	1,116
General and administrative	3,788	3,867	8,807	7,833
Total operating expenses	119,813	24,161	246,485	48,548
Income (loss) from operations	(93,596)	10,833	(194,490)	20,648
Other income (expense)
Interest and other income	4,104	2,228	4,121	2,362
Gain on debt extinguishment	14,407		14,407
Interest expense	(6,735)	(645)	(11,968)	(1,399)
Loss on contingent consideration	(140)		(270)
Gain (loss) on derivative financial instruments	(3,300)	(1,668)	661	(2,661)
Total other income (expense)	8,336	(85)	6,951	(1,698)
Income (loss) before taxes	(85,260)	10,748	(187,539)	18,950
Deferred income tax expense (benefit)	16	(6)	8	(14)
Net income (loss)	(85,276)	10,754	(187,547)	18,964
Less dividends and accretion on preferred shares	2	2	5	5
Net income (loss) applicable to common stockholders	$ (85,278)	$ 10,752	$ (187,552)	$ 18,959
Earnings (loss) per share-Basic (in dollars per share)	$ (1.05)	$ 0.15	$ (2.31)	$ 0.26
Earnings (loss) per share-Diluted (in dollars per share)	$ (1.05)	$ 0.15	$ (2.31)	$ 0.26
Weighted average common shares outstanding-Basic (in shares)	81,202,007	73,651,858	81,036,508	73,379,507
Weighted average common shares outstanding-Diluted (in shares)	81,202,007	73,904,104	81,036,508	73,558,350

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ (85,276)	$ 10,754	$ (187,547)	$ 18,964
Other comprehensive income (loss)
Gain (loss) on investments available for sale	(26)	9	(14)	20
Comprehensive income (loss)	$ (85,302)	$ 10,763	$ (187,561)	$ 18,984

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ (187,547)	$ 18,964
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Accretion of discount on available- for- sale debt securities	(34)	(32)
Accretion of discount on senior notes	45
Amortization of deferred offering costs	607	113
Depreciation, depletion, amortization and impairment	211,313	20,889
Change in fair value of derivative financial instruments	4,474	(617)
Stock option expense	1,677	1,069
Gain on debt extinguishment	(14,407)
Deferred tax (benefit)	8	(14)
Change in assets and liabilities:
Decrease in accounts receivable-trade	11,640	6,767
Increase in other assets	(1,500)	(510)
Decrease in accounts payable and accruals	(12,851)	(7,018)
Decrease in other long-term liabilities	(431)	(260)
Net cash provided by operating activities	12,994	39,351
Cash flows from investing activities:
Purchase, exploration and development of oil and gas properties	(29,330)	(35,312)
Purchase of property and equipment	(490)	(982)
Net cash used in investing activities	(29,820)	(36,294)
Cash flows from financing activities:
Proceeds from Credit Facility	189,559	14,500
Payments on debt and debentures	(158,748)	(27,525)
Payments on taxes of vested restricted stock and proceeds from the exercise of options	(329)	102
Net cash provided by (used in) financing activities	30,482	(12,923)
Net increase (decrease) in cash and cash equivalents	13,656	(9,866)
Cash and cash equivalents at beginning of period	1,703	11,620
Cash and cash equivalents at end of period	15,359	1,754
Supplemental disclosure of cash flow information
Cash paid for interest, net of amounts capitalized	15,185	1,335
Noncash investing and financing activities
Accrued preferred stock dividend	5	$ 5
Exchange of Senior Notes for First Lien debt	$ 47,164

ORGANIZATION

ORGANIZATION	6 Months Ended
	Jun. 30, 2015
ORGANIZATION
ORGANIZATION	NOTE A—ORGANIZATION Warren Resources, Inc. (the “Company” or “Warren”), was originally formed on June 12, 1990 for the purpose of acquiring and developing oil and gas properties. The Company is incorporated under the laws of the state of Maryland. The Company’s properties are primarily located in California, Pennsylvania, and Wyoming. The accompanying unaudited financial statements and related notes present the Company’s consolidated financial position as of June 30, 2015 and December 31, 2014, the consolidated results of operations for the three and six months ended June 30, 2015 and 2014, the consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2015 and 2014 and consolidated cash flows for the six months ended June 30, 2015 and 2014. The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. The accounting policies followed by the Company are set forth in Note A to the Company’s financial statements included in Form 10-K for the year ended December 31, 2014. These interim financial statements and notes thereto should be read in conjunction with the consolidated financial statements presented in the Company’s 2014 Annual Report on Form 10-K.

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	6 Months Ended
	Jun. 30, 2015
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION	NOTE B—STOCK BASED COMPENSATION Stock Options Compensation expense related to stock options and restricted stock awards recognized in operating results (general and administrative expenses) was approximately $0.6 million and $0.5 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and approximately $1.7 and $1.1 million for the six months ending June 30, 2015 and June 30, 2014, respectively. The following assumptions were used to value stock options calculated using the Black-Scholes options pricing model: Six months ended June 30, 2015 2014 Dividend yield % % Expected volatility % % Risk-free interest rate % % Expected life 3.5 years 3.5 years Weighted Weighted Average Average Aggregate Number Exercise Remaining Intrinsic Value of Options Price Term (in years) (in thousands) Outstanding at March 31, 2015 $ Granted Exercised — — Forfeited or expired ) Outstanding at June 30, 2015 $ $ — Exercisable at June 30, 2015 $ $ — The total intrinsic value of options exercised during the six months ended June 30 , 2015 and 2014 were approximately $0 and $1.0 million respectively. As of June 30, 2015 total unrecognized stock-based compensation expense related to non-vested stock options was approximately $2.9 million, which we expect to recognize over a weighted average period of 2.0 years. Restricted Shares Restricted share activity for the six months ended June 30, 2015 was as follows: Shares Weighted Average Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) Outstanding at June 30, 2015 $ Restricted stock awards for executive officers and employees generally vest ratably over three years. Fair value of our restricted shares is based on our closing stock price on the date of grant. As of June 30, 2015, total unrecognized stock-based compensation expense related to non-vested restricted shares was $0.9 million, which is expected to be recognized over a weighted average period of approximately 1.7 years.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2015
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE C—STOCKHOLDERS’ EQUITY The preferred stock pays an 8% cumulative dividend which is treated as a deduction of additional paid in capital, due to insufficient retained earnings. The holders of the preferred stock are not entitled to vote except as defined by the agreement or as provided by applicable law. The preferred stock may be voluntarily converted, at the election of the holder, into common stock of the Company based on a conversion rate of one share of preferred stock for 0.50 shares of common stock. The accrual of the dividend is deducted from earnings in the calculation of earnings attributable to common stockholders. Additionally, holders of the preferred stock can elect to require the Company to redeem their preferred stock at a redemption price equal to the liquidation value of $12.00 per share, plus accrued but unpaid dividends, if any, (“Redemption Price”). Upon the receipt of a redemption election, the Company, at its option, shall either: (1) pay the holder cash in the amount equal to the Redemption Price or (2) issue to the holder shares of common stock in an amount equal to 125% of the redemption price and any accrued and unpaid dividends, based on the weighted average closing “bid” price of the Company’s common stock for the thirty trading days immediately preceding the date of the written redemption election by the holder up to a maximum of 1.5 shares of common stock for each one share of preferred stock redeemed. The Company has accreted the carrying value of its preferred stock to its redemption price using the effective interest method with changes recorded to additional paid in capital. The accretion of preferred stock results in a reduction of earnings applicable to common stockholders. Notwithstanding the forgoing, if the closing “bid” price of the Company’s publicly traded common stock as reported by the NASDAQ stock market, or any exchange on which the shares of common stock are traded, exceeds 133% of the conversion price then in effect for the convertible preferred shares for at least 10 days during any 30-day trading period, the Company has the right to redeem in whole or in part the convertible preferred stock at a redemption price of $12 per share (plus any accrued unpaid dividends) or convert the convertible preferred shares (plus any accrued unpaid dividends) into common stock at the then applicable conversion rate.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE D—EARNINGS PER SHARE Basic earnings (loss) per share is computed by dividing net earnings (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is based on the assumption that stock options are converted into common shares using the treasury stock method and convertible bonds and preferred stock are converted using the if-converted method. Conversion is not assumed if the results are anti-dilutive. Potential common shares for the six months ended June 30, 2015 and 2014 of 38,072 and 38,072, respectively, relating to convertible bonds and preferred stock were excluded from the computation of diluted earnings per share because they are anti-dilutive. Potential common shares of 4,116,304 and 2,392,313 relating to stock options and restricted stock were excluded from the computation of diluted earnings per share for the six months ended June 30, 2015 and 2014, respectively, because they are anti-dilutive. At June 30, 2015 the convertible bonds may be converted from the date of issuance until maturity at 100% of principal amount into common stock of the Company at a price of $50. The preferred stock may be converted at the discretion of the holder or upon meeting certain conditions at the discretion of the Company (see Note C). Basic and diluted net earnings (loss) per share are computed based on the following information: Three Months Ended June 30, 2015 Three Months Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (in thousands, except for per share data) (in thousands, except for per share data) Net earnings (loss) applicable to common shareholders $ ) $ $ ) $ Weighted average shares outstanding — basic Effect of dilutive securities — restricted stock — — — — Effect of dilutive securities — stock options — — Weighted average shares outstanding - diluted Basic net earnings (loss) per share $ ) $ $ ) $ Diluted net earnings (loss) per share $ ) $ $ ) $

LONG-TERM LIABILITIES

LONG-TERM LIABILITIES	6 Months Ended
	Jun. 30, 2015
LONG-TERM LIABILITIES
LONG-TERM LIABILITIES	NOTE E—LONG-TERM LIABILITIES Long-term liabilities consisted of the following for the balance sheets dated: June 30, December 31, 2015 2014 (in thousands) Line of Credit $ — $ First Lien Credit Facility — Derivative Financial Instruments — Convertible Debentures Senior Notes Discount on Senior Notes ) ) Contingent Earn-Out Asset retirement obligations Less current portion Long-term portion $ $ On May 22, 2015, Warren Resources entered into a credit agreement with Franklin Square Capital Partners, LP which provides for a five-year, $250 million term loan facility (the “First Lien Credit Facility”) which matures on May 22, 2020. At the closing of the First Lien Credit Facility, certain of the lenders extended credit in the form of new term loans in the amount of $172.5 million and in the form of commitments for delayed draw term loans for up to an additional $30 million, subject to certain incurrence tests. The new credit facility encompasses new terms and is collateralized by substantially all of Warren’s assets. Warren has used the proceeds from the new credit facility to repay the balance on its former credit facility, and has been released from all legal obligations on the former line of credit. Convertible Debentures The convertible debentures may be converted from the date of issuance until maturity at 100% of principal amount into common stock of the Company at a conversion price of $50. Each year the holders of the convertible debentures may tender to the Company up to 10% of the aggregate debentures issued and outstanding. During the three and six months ended June 30, 2015, there were no debenture redemptions. 9.000% Senior Notes due 2022 To finance the Marcellus Asset Acquisition (See Note L) in 2014, the Company issued the 9.000% senior notes in a private offering at a price equal to 98.617% due to mature on August 1, 2022 (the “Senior Notes”). Interest is payable on the Senior Notes semi-annually in arrears at a rate of 9.000% per annum on each February 1 and August 1. On May 22, 2015 as part of the closing of the First Lien Credit Facility, certain of the lenders exchanged at face value $69.59 million of the Company’s previously issued 9.000% Senior Notes due 2022 at a discount for approximately $45.23 million of First Lien Term Loans due 2020 plus accrued unpaid interest of $1.93 million rolled into the First Lien Term Loans as additional borrowing. The company accounted for this transaction in accordance with ASC 470 and ASC 405 and as a result recognized a gain on the retirement of debt in the amount of $14.4 million during the period. At June 30, 2015, the face amount of the Senior Notes was $230.41 million and the market value was approximately $110.6 million. We may redeem, at specified redemption prices, some or all of the Senior Notes at any time on or after August 1, 2017. We may also redeem up to 35% of the Senior Notes using the proceeds of certain equity offerings completed before August 1, 2017. If we sell certain of our assets or experience certain kinds of changes in control, we may be required to offer to purchase the Senior Notes from the holders. The Senior Notes will be fully, unconditionally and jointly and severally guaranteed on a senior unsecured basis by certain of our existing subsidiaries and will be fully, unconditionally and jointly and severally guaranteed on a senior unsecured basis by our future domestic subsidiaries, subject to certain exceptions. On July 27, 2015, substantially all of the outstanding Senior Notes were exchanged for an equal principal amount of registered 9.000% senior notes due 2022 pursuant to an effective registration statement on Form S-4 that was declared effective by the Securities and Exchange Commission on June 19, 2015 under the Securities Act (the “Exchange Notes”). The Exchange Notes are identical to the Senior Notes except that the Exchange Notes are registered under the Securities Act and do not have restrictions on transfer, registration rights or provisions for additional interest.

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	6 Months Ended
	Jun. 30, 2015
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION	NOTE F—ASSET RETIREMENT OBLIGATION The estimated fair value of the future costs associated with dismantlement, abandonment and restoration of oil and gas properties is recorded generally upon acquisition or completion of a well. The net estimated costs are discounted to present values using a risk adjusted rate over the estimated economic life of the oil and gas properties. Such costs are capitalized as part of the related asset. The asset is depleted on the units-of-production method. The associated liability is classified in other long-term liabilities, net of current portion, in the accompanying Consolidated Balance Sheets. The liability is periodically adjusted to reflect (1) new liabilities incurred, (2) liabilities settled during the period, (3) accretion expense, and (4) revisions to estimated future cash flow requirements. The accretion expense is recorded as a component of depreciation, depletion and amortization. The Company has cash held in escrow with a fair market value of $2.8 million that is legally restricted for potential plugging and abandonment liability in the Wilmington field which is recorded in other assets in the Consolidated Balance Sheets. A reconciliation of the Company’s asset retirement obligations is as follows: June 30, 2015 (in thousands) Balance at beginning of period $ Liabilities incurred in current period Liabilities settled in current period ) Accretion expense Balance at end of period $

CONTINGENCIES

CONTINGENCIES	6 Months Ended
	Jun. 30, 2015
CONTINGENCIES
CONTINGENCIES	NOTE G—CONTINGENCIES We are party to a variety of legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. Although we cannot predict the outcome of these proceedings with certainty, we do not currently expect these matters to have a material adverse effect on our consolidated financial position or results of operations. There have been no significant changes with respect to the legal matters disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE H — FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values of financial instruments recognized in the Consolidated Balance Sheets or disclosed within these Notes to Consolidated Financial Statements have been determined using available market information, information from unrelated third party financial institutions and appropriate valuation methodologies, primarily discounted projected cash flows. However, considerable judgment is required when interpreting market information and other data to develop estimates of fair value. Short-term Assets and Liabilities. The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. U.S. Treasury Bonds - Trading and Available-For-Sale Securities. The fair values are based upon quoted market prices for those or similar investments and are reported on the Consolidated Balance Sheets at fair value. Collateral Security Agreement Account (included in other non-current assets). The balance sheet carrying amount approximates fair value, as it earns a market rate. Convertible Debentures . Fair values of fixed rate convertible debentures were calculated using interest rates in effect as of period end for similar instruments with the other terms unchanged. Other Long-Term Liabilities . The carrying amount approximates fair value due to the current rates offered to the Company for long-term liabilities of the same remaining maturities. First Lien Credit Facility. The carrying amount approximates fair value due to the current rate stipulated in the first lien credit facility agreement. Derivatives. The fair values are based upon observable inputs based on market data obtained from independent sources and are considered Level 2 inputs (quoted prices for similar assets, liabilities (adjusted) and market-corroborated inputs) and are reported on the Consolidated Balance Sheets at fair value. 9.000% Senior Notes. The fair value is based upon quoted market prices for those or similar investments and are reported on the Consolidated Balance Sheets at face value, net of discount. Contingent Earn-Out. The fair value is based on the present value of the amount discounted back at the cost of capital. June 30, 2015 December 31, 2014 Fair Carrying Fair Carrying value amount value amount (in thousands) Financial assets Collateral security account $ $ $ $ Financial liabilities Fixed rate debentures $ $ $ $ Credit Facility — — First Lien Credit Facility — — Senior Notes Contingent Earn-Out FAIR VALUE MEASUREMENTS: Fair value as defined by authoritative literature is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three level hierarchy for measuring fair value. The literature requires fair value measurements be classified and disclosed in one of the following categories: Level 1 : Quoted prices (unadjusted) in active markets for identical assets and liabilities that we have the ability to access at the measurement date. Level 2 : Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 include non-exchange traded derivatives such as over-the-counter forwards and swaps. Level 3 : Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. The following tables present for each hierarchy level our assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis. June 30, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Restricted investments in US Treasury Bonds — available for sale, at fair value $ $ — $ — $ Level 1 Level 2 Level 3 Total (in thousands) Liabilities Commodity derivatives $ — $ $ — $ December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Assets Restricted investments in US Treasury Bonds — available for sale, at fair value $ $ — $ — $ Commodity derivatives $ — $ $ — $

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2015
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS	NOTE I — DERIVATIVE FINANCIAL INSTRUMENTS To minimize the effect of a downturn in oil and gas prices and protect our profitability and the economics of our development plans, we enter into crude oil and natural gas hedge contracts. The terms of contracts depend on various factors, including management’s view of future crude oil and natural gas prices. This price hedging program is designed to moderate the effects of a crude oil and natural gas price downturn while allowing us to participate in some commodity price increases. Management regularly monitors the crude oil and natural gas markets and our financial commitments to determine if, when, and at what level some form of crude oil and/or natural gas hedging and/or basis adjustments or other price protection is appropriate. However, we may use a variety of derivative instruments in the future to hedge. The Company has not designated these derivatives as hedges for accounting purposes. The Company routinely enters into derivative contracts with a variety of counterparties, typically resulting in individual derivative instruments with both fair value asset and liability positions. The Company nets the fair values of derivative instruments executed with the same counterparty pursuant to ISDA master agreements, which mitigate the credit risk of the Company’s derivative instruments by providing for net settlement over the term of the contract and in the event of default or termination of the contract. The following table summarizes the open financial derivative positions, as of June 30, 2015, related to oil and gas production. The Company will receive prices as noted in the table below and will pay a counterparty market price based on the NYMEX (for natural gas production) or WTI (for oil production) index price, settled monthly. Product Type Contract Period Volume Price per Mcf or Bbl NYMEX Oil Swap 07/01/15- 09/30/15 1,300 Bbl/d $ NYMEX Oil Swap 07/01/15- 09/30/15 400 Bbl/d $ NYMEX Oil Swap 10/01/15- 03/31/16 250 Bbl/d $ NYMEX Oil Collar 10/01/15- 03/31/16 500 Bbl/d $ 50.00- 64.00 NYMEX Oil Collar 07/01/16- 06/30/16 250 Bbl/d $ 55.00- 69.97 NYMEX Oil Collar 07/01/16- 12/31/16 500 Bbl/d $ 50.00- 71.50 NYMEX Oil Collar 10/01/15- 12/31/15 500 Bbl/d $ 50.00- 68.15 NYMEX Gas Swap 07/01/15- 12/31/15 3,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 10/31/15 10,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 10/31/15 10,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 12/31/15 15,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 03/31/16 5,000 MMBtu/d $ The tables below summarize the amount of gains (losses) recognized in income from derivative instruments not designated as hedging instruments under authoritative guidance. Derivatives not designated as For the Three Months For the Six Months Hedging Instrument under Ended June 30, Ended June 30, authoritative guidance 2015 2014 2015 2014 (in thousands) Realized cash settlements on hedges $ $ ) $ $ ) Mark-to-market gain (loss) on hedges ) ) ) Total $ ) $ ) $ $ ) The table below reflects the line item in our Consolidated Balance Sheet where the fair value of our net derivatives, are included. June 30, 2015 Derivative Assets (in thousands) Balance Sheet Location Fair Value Commodity—Natural Gas Current $ Total derivatives not designated as hedging instruments $ June 30, 2015 Derivative Liabilities (in thousands) Balance Sheet Location Fair Value Commodity—Oil Current $ Commodity—Oil Non-current Total derivatives not designated as hedging instruments $ December 31, 2014 Derivative Assets (in thousands) Balance Sheet Location Fair Value Commodity—Natural Gas Current $ Commodity—Oil Current Total derivatives not designated as hedging instruments $ Derivatives Credit Risk The Company does not require collateral or other security from counterparties to support derivative instruments. However, the agreements with those counterparties typically contain netting provisions such that if a default occurs, the non-defaulting party can offset the amount payable to the defaulting party under the derivative contract with the amount due from the defaulting party. As a result of the netting provisions the Company’s maximum amount of loss due to credit risk is limited to the net amounts due to and from the counterparties under the derivative contracts. The Company’s derivative agreements contain provisions that require cross defaults and acceleration of those instruments to any material debt. If the Company were to default on any of its material debt agreements, it would be a violation of these provisions, and the counterparties to the derivative instruments could request immediate payment on derivative instruments that are in a net liability position at that time

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
INCOME TAXES
INCOME TAXES	NOTE J — INCOME TAXES The Company’s effective tax rate differs from the federal statutory tax rate due to changes in the valuation allowance on the Company’s net deferred tax asset.

RECENTLY ISSUED ACCOUNTING STAN

RECENTLY ISSUED ACCOUNTING STANDARDS	6 Months Ended
	Jun. 30, 2015
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS	NOTE K — RECENTLY ISSUED ACCOUNTING STANDARDS In April 2015, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that is intended to simplify the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2015, and interim periods within those years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements and related disclosures.

ACQUISITIONS

ACQUISITIONS	6 Months Ended
	Jun. 30, 2015
ACQUISITIONS
ACQUISITIONS	NOTE L — ACQUISITIONS Marcellus Assets On August 11, 2014, we acquired essentially all of the Marcellus Assets of Citrus Energy Corporation (‘‘Citrus’’) and two other working interest owners in exchange for approximately 6.7 million shares of our common stock valued at $41.4 million and cash consideration of $312.5 million, subject to certain post-closing adjustments and certain closing conditions (the ‘‘Marcellus Asset Acquisition’’). The Marcellus Asset Acquisition was accounted for as a business combination in accordance with Accounting Standards Codification (ASC) No. 805, Business Combinations (ASC 805) which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values. The purchase price of the Marcellus Assets (in thousands): December 31, 2014 Cash consideration $ Fair value of Warren equity common shares Closing adjustments ) Fair value of earn-out provision Fair value of farm-out provision Total purchase price $ In connection with the Marcellus Asset Acquisition, a contingent consideration payment was included as part of the purchase and sale agreement with a maximum payout of $8.5 million, based upon proved reserves and price differential factors. The fair value of this consideration is based on a 90% probability of achieving the full payout discounted to present value. The following table presents the initial purchase price allocation of the Marcellus Asset, based on the fair values of assets acquired and liabilities assumed (in thousands): December 31, 2014 Proved oil and gas properties $ Unproved oil and gas properties Total purchase price $ Pro Forma Impact of Acquisitions (Unaudited) The following unaudited pro forma combined results of operations are provided for the three and six months ended June 30, 2014 as though the Marcellus Asset Acquisition had occurred prior to that date. The pro forma combined results of operations for the three and six months ended June 30, 2014 have been prepared by adjusting the historical results of the Company to include the historical results of the Marcellus Assets. These supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the period presented or that may be achieved by the combined company in the future. The pro forma results of operations do not include any cost savings or other synergies that resulted, or may result, from the Marcellus Asset Acquisition. Future results may vary significantly from the results reflected in this unaudited pro forma financial information because of future events and transactions, as well as other factors. The Company’s historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the Marcellus Asset Acquisition that were factually supportable. Adjustments and assumptions made for this pro forma calculation are consistent with those used in the Company’s pro forma information previously filed with the SEC. For the Three Months For the Six Months Ended June 30, Ended June 30, (in thousands) 2014 2014 Revenues $ $ Income from Operations Net income $ $ Diluted net income per share $ $

CAPITALIZED INTEREST

CAPITALIZED INTEREST	6 Months Ended
	Jun. 30, 2015
CAPITALIZED INTEREST	NOTE M — CAPITALIZED INTEREST The Company capitalizes interest on qualifying assets, which include investments in undeveloped oil and natural gas properties and exploration and development projects for which depletion expense is not currently recognized, and for which exploration or development activities are in progress. The capitalized interest is determined by multiplying the Company’s interest rate on specific borrowing costs, adjusted to include amortization of bond discount and issuance costs, related to the Senior Notes or exchanges of the Senior Notes used to purchase the Marcellus Assets, by the qualifying costs incurred that are excluded from the full cost pool. However, the amount of capitalized interest cannot exceed the amount of gross interest expense incurred in any given period. The capitalized interest amounts are recorded as additions to unevaluated oil and natural gas properties on the unaudited condensed consolidated balance sheets. As the costs excluded are transferred to the full cost pool, the associated capitalized interest is also transferred to the full cost pool. Interest of $3.4 million and $6.6 million relating to the Senior Notes was capitalized during the three and six months ended June 30, 2015.

RECENT DEVELOPMENTS

RECENT DEVELOPMENTS	6 Months Ended
	Jun. 30, 2015
RECENT DEVELOPMENTS
RECENT DEVELOPMENTS	NOTE N — RECENT DEVELOPMENTS On June 16, 2015, the Company and its wholly-owned subsidiary Warren E&P, Inc., entered into non-exclusive purchase and sale agreements with Escalera Resources, Co., pursuant to which Warren will sell all of its interests in its shallow depth coal bed methane assets, which are located in the Atlantic Rim area of the Washakie Basin in Carbon County, Wyoming, appurtenant midstream pipeline assets, and an undivided 30% of its interest in certain deep rights associated with Warren’s former leases in the Atlantic Rim area, to Escalera with an effective date of April 1, 2015. The total purchase price for these assets will be $47 million, with $42 million payable in cash at closing. Following consummation of the transaction, Warren will retain 70% of the operated deep rights associated with Warren’s former leases in the Atlantic Rim area, across 68,700 gross acres, which are currently being evaluated for potential upside in a number of the deep formations present. The sale is subject to closing conditions and adjustments, including completion of the purchaser’s financing.

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK BASED COMPENSATION
Schedule of assumptions used to value stock options calculated using the Black-Scholes options pricing model	Six months ended June 30, 2015 2014 Dividend yield % % Expected volatility % % Risk-free interest rate % % Expected life 3.5 years 3.5 years
Schedule of options issued to employees and changes during the years	Weighted Weighted Average Average Aggregate Number Exercise Remaining Intrinsic Value of Options Price Term (in years) (in thousands) Outstanding at March 31, 2015 $ Granted Exercised — — Forfeited or expired ) Outstanding at June 30, 2015 $ $ — Exercisable at June 30, 2015 $ $ —
Schedule of restricted share activity	Shares Weighted Average Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Forfeited ) Outstanding at June 30, 2015 $

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
EARNINGS PER SHARE
Schedule of computation of basic and diluted net earnings (loss) per share	Three Months Ended June 30, 2015 Three Months Ended June 30, 2014 Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 (in thousands, except for per share data) (in thousands, except for per share data) Net earnings (loss) applicable to common shareholders $ ) $ $ ) $ Weighted average shares outstanding — basic Effect of dilutive securities — restricted stock — — — — Effect of dilutive securities — stock options — — Weighted average shares outstanding - diluted Basic net earnings (loss) per share $ ) $ $ ) $ Diluted net earnings (loss) per share $ ) $ $ ) $

LONG-TERM LIABILITIES (Tables)

LONG-TERM LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2015
LONG-TERM LIABILITIES
Schedule of long-term liabilities, excluding derivative financial instruments	June 30, December 31, 2015 2014 (in thousands) Line of Credit $ — $ First Lien Credit Facility — Derivative Financial Instruments — Convertible Debentures Senior Notes Discount on Senior Notes ) ) Contingent Earn-Out Asset retirement obligations Less current portion Long-term portion $ $

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	6 Months Ended
	Jun. 30, 2015
ASSET RETIREMENT OBLIGATION
Schedule of reconciliation of the Company's asset retirement obligations	June 30, 2015 (in thousands) Balance at beginning of period $ Liabilities incurred in current period Liabilities settled in current period ) Accretion expense Balance at end of period $

FAIR VALUE OF FINANCIAL INSTR25

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS
Schedule of carrying amount and estimated fair value of financial instruments	June 30, 2015 December 31, 2014 Fair Carrying Fair Carrying value amount value amount (in thousands) Financial assets Collateral security account $ $ $ $ Financial liabilities Fixed rate debentures $ $ $ $ Credit Facility — — First Lien Credit Facility — — Senior Notes Contingent Earn-Out
Schedule of assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis	June 30, 2015 Level 1 Level 2 Level 3 Total (in thousands) Assets Restricted investments in US Treasury Bonds — available for sale, at fair value $ $ — $ — $ Level 1 Level 2 Level 3 Total (in thousands) Liabilities Commodity derivatives $ — $ $ — $ December 31, 2014 Level 1 Level 2 Level 3 Total (in thousands) Assets Restricted investments in US Treasury Bonds — available for sale, at fair value $ $ — $ — $ Commodity derivatives $ — $ $ — $

DERIVATIVE FINANCIAL INSTRUME26

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
DERIVATIVE FINANCIAL INSTRUMENTS
Summary of open financial derivative positions related to oil and gas production	Product Type Contract Period Volume Price per Mcf or Bbl NYMEX Oil Swap 07/01/15- 09/30/15 1,300 Bbl/d $ NYMEX Oil Swap 07/01/15- 09/30/15 400 Bbl/d $ NYMEX Oil Swap 10/01/15- 03/31/16 250 Bbl/d $ NYMEX Oil Collar 10/01/15- 03/31/16 500 Bbl/d $ 50.00- 64.00 NYMEX Oil Collar 07/01/16- 06/30/16 250 Bbl/d $ 55.00- 69.97 NYMEX Oil Collar 07/01/16- 12/31/16 500 Bbl/d $ 50.00- 71.50 NYMEX Oil Collar 10/01/15- 12/31/15 500 Bbl/d $ 50.00- 68.15 NYMEX Gas Swap 07/01/15- 12/31/15 3,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 10/31/15 10,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 10/31/15 10,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 12/31/15 15,000 MMBtu/d $ NYMEX Gas Swap 07/01/15- 03/31/16 5,000 MMBtu/d $
Summary of amount of gains (losses) recognized in income from derivative instruments not designated as hedging instruments	Derivatives not designated as For the Three Months For the Six Months Hedging Instrument under Ended June 30, Ended June 30, authoritative guidance 2015 2014 2015 2014 (in thousands) Realized cash settlements on hedges $ $ ) $ $ ) Mark-to-market gain (loss) on hedges ) ) ) Total $ ) $ ) $ $ )
Schedule of fair value and balance sheet location of net derivatives	June 30, 2015 Derivative Assets (in thousands) Balance Sheet Location Fair Value Commodity—Natural Gas Current $ Total derivatives not designated as hedging instruments $ June 30, 2015 Derivative Liabilities (in thousands) Balance Sheet Location Fair Value Commodity—Oil Current $ Commodity—Oil Non-current Total derivatives not designated as hedging instruments $ December 31, 2014 Derivative Assets (in thousands) Balance Sheet Location Fair Value Commodity—Natural Gas Current $ Commodity—Oil Current Total derivatives not designated as hedging instruments $

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	6 Months Ended
	Jun. 30, 2015
ACQUISITIONS
Schedule of business acquisition purchase price	The purchase price of the Marcellus Assets (in thousands): December 31, 2014 Cash consideration $ Fair value of Warren equity common shares Closing adjustments ) Fair value of earn-out provision Fair value of farm-out provision Total purchase price $
Schedule of initial purchase price allocation of the acquisition	The following table presents the initial purchase price allocation of the Marcellus Asset, based on the fair values of assets acquired and liabilities assumed (in thousands): December 31, 2014 Proved oil and gas properties $ Unproved oil and gas properties Total purchase price $
Summary of unaudited pro forma financial information	For the Three Months For the Six Months Ended June 30, Ended June 30, (in thousands) 2014 2014 Revenues $ $ Income from Operations Net income $ $ Diluted net income per share $ $

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Stockholders' equity
Compensation expense related to stock options and restricted stock awards	$ 0.6	$ 0.5	$ 1.7	$ 1.1
Stock options
Weighted-average assumptions used to value stock options
Dividend yield (as a percent)			0.00%	0.00%
Weighted average volatility (as a percent)			60.72%	52.80%
Risk-free interest rate (as a percent)			1.90%	1.00%
Expected life			3 years 6 months	3 years 6 months
Number of Options
Outstanding at the beginning of the period (in shares)	3,618,126
Granted (in shares)	293,000
Forfeited or expired (in shares)	(280,067)
Outstanding at the end of the period (in shares)	3,631,059		3,631,059
Exercisable at the end of the period (in shares)	643,927		643,927
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 2.85
Granted (in dollars per share)	0.76
Forfeited or expired (in dollars per share)	2.94
Outstanding at the end of the period (in dollars per share)	2.67		$ 2.67
Exercisable at the end of the period (in dollars per share)	$ 3.48		$ 3.48
Weighted Average Remaining Term (in years)
Outstanding at the end of the period	4 years 1 month 6 days
Exercisable at the end of the period	2 years 4 months 2 days
Additional disclosures
Total intrinsic value of options exercised			$ 0	$ 1
Total unrecognized stock-based compensation expense	$ 2.9		$ 2.9
Weighted Average Fair Value
Weighted average period over which unrecognized compensation cost is expected to be recognized			2 years
Restricted Shares
Shares
Outstanding at the beginning of the period (in shares)			689,370
Granted (in shares)			521,322
Vested (in shares)			(697,630)
Forfeited (in shares)			(27,817)
Outstanding at the end of the period (in shares)	485,245		485,245
Weighted Average Fair Value
Outstanding at the beginning of the period (in dollars per share)			$ 2.87
Granted (in dollars per share)			1.11
Vested (in dollars per share)			1.79
Forfeited (in dollars per share)			3.36
Outstanding at the end of the period (in dollars per share)	$ 2.50		$ 2.50
Vesting period			3 years
Total unrecognized stock-based compensation expense	$ 0.9		$ 0.9
Weighted average period over which unrecognized compensation cost is expected to be recognized			1 year 8 months 12 days

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
STOCKHOLDERS' EQUITY
Cumulative dividend on preferred stock (as a percent)	8.00%	8.00%
Number of common shares into which one share of preferred stock is to be converted	0.50
Shares to be issued as percentage of redemption price and any accrued and unpaid dividends	125.00%
Number of trading days considered for calculating the weighted average closing bid price at which preferred stock will be redeemed	30 days
Maximum number of shares of common stock that the company, at its option, can issue for each one share of preferred stock redeemed	1.5
Percentage of conversion price that the entity's common stock must exceed to give the entity the right to redeem	133.00%
Minimum number of days within 30-day trading period in which the closing price of the entity's common stock must exceed the conversion price	10 days
Number of trading days during which the closing bid price of the entity's common stock must exceed the conversion price	30 days
Preferred stock
Redemption price (in dollars per share)	$ 12
Preferred stock
Preferred stock
Redemption price (in dollars per share)	$ 12

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic and diluted net earnings per share
Net earnings (loss) applicable to common shareholders	$ (85,278)	$ 10,752	$ (187,552)	$ 18,959
Weighted average shares outstanding - basic	81,202,007	73,651,858	81,036,508	73,379,507
Effect of dilutive securities - stock options		252,246		178,843
Weighted average shares outstanding - diluted	81,202,007	73,904,104	81,036,508	73,558,350
Basic net earnings (loss) per share (in dollars per share)	$ (1.05)	$ 0.15	$ (2.31)	$ 0.26
Diluted net earnings (loss) per share (in dollars per share)	(1.05)	$ 0.15	$ (2.31)	$ 0.26
Convertible bonds and preferred stock
Earnings per share
Anti-dilutive securities (in shares)			38,072	38,072
Stock options and restricted stock
Earnings per share
Anti-dilutive securities (in shares)			4,116,304	2,392,313
Secured Convertible Debentures
Earnings per share
Percentage of principal amount at which debentures may be converted from the date of issuance until maturity into common stock			100.00%
Conversion price (in dollars per share)	$ 50		$ 50

LONG-TERM LIABILITIES (Details)

LONG-TERM LIABILITIES (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 01, 2017	May. 22, 2015	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Aug. 11, 2014
LONG-TERM LIABILITIES
Derivative Financial Instruments			$ 469	$ 469
Convertible Debentures			1,636	1,636	$ 1,636
Senior Notes			230,410	230,410	300,000
Discount on Senior Notes			(2,824)	(2,824)	(3,947)
Contingent Earn-Out			6,800	6,800	6,530
Asset retirement obligations			30,751	30,751	29,771
Total long-term liabilities			486,907	486,907	468,739
Less current portion			789	789	381
Long-term portion			486,118	486,118	468,358
Long-term liabilities
Gain on retirement of debt			14,407	14,407
Credit Facility | The "Credit Facility"
Long-term liabilities
Line of Credit					$ 134,749
Credit Facility | The "First Lien Credit Facility"
Long-term liabilities
Line of Credit			$ 219,665	$ 219,665
Term of credit facility		5 years
Borrowing capacity		$ 250,000
Credit Facility | Certain Lenders | The "First Lien Credit Facility"
Long-term liabilities
Borrowing capacity		172,500
Additional borrowing capacity		30,000
Amount of First Lien Credit Facility exchanged from Senior Notes		45,230
Secured Convertible Debentures
Long-term liabilities
Percentage of principal amount at which debentures may be converted from the date of issuance until maturity into common stock			100.00%
Conversion price (in dollars per share)			$ 50	$ 50
Amount of bond redemptions			$ 0	$ 0
Secured Convertible Debentures | Maximum
Long-term liabilities
Percentage of issued and outstanding debentures may be converted each year			10.00%
Senior Notes
Long-term liabilities
Accrued unpaid interest rolled into the First Lien Term Loans		1,930
Percentage on initial purchase price						98.617%
Interest rate (as a percent)			9.00%	9.00%
Gain on retirement of debt				$ 14,400
Senior notes, face amount			$ 230,410	230,410
Senior note, market value			$ 110,600	$ 110,600
Senior Notes | Certain Lenders
Long-term liabilities
Face Value of Senior Notes exchanged to First Lien Credit Facility		$ 69,590
Senior Notes | Maximum | Forecast | Subsequent Event
Long-term liabilities
Percentage of Senior Notes can be redeemed on or after August 1, 2017	35.00%

ASSET RETIREMENT OBLIGATION (De

ASSET RETIREMENT OBLIGATION (Details) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
ASSET RETIREMENT OBLIGATION
Fair market value of cash held in escrow that is legally restricted for potential plugging and abandonment liability	$ 2,800
Reconciliation of asset retirement obligations
Balance at beginning of period	29,771
Liabilities incurred in current period	9
Liabilities settled in current period	(431)
Accretion expense	1,402
Balance at end of period	$ 30,751

FAIR VALUE OF FINANCIAL INSTR33

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair value
Financial assets
Collateral security account	$ 2,812	$ 3,165
Financial liabilities
Fixed rate debentures	3,045	3,035
Senior Notes	110,597	195,000
Contingent Earn-Out	6,800	6,530
Carrying amount
Financial assets
Collateral security account	2,812	3,165
Financial liabilities
Fixed rate debentures	1,636	1,636
Senior Notes	227,586	296,053
Contingent Earn-Out	6,800	6,530
The "Credit Facility" | Fair value
Financial liabilities
Line of credit		134,749
The "Credit Facility" | Carrying amount
Financial liabilities
Line of credit		$ 134,749
The "First Lien Credit Facility" | Fair value
Financial liabilities
Line of credit	219,665
The "First Lien Credit Facility" | Carrying amount
Financial liabilities
Line of credit	$ 219,665

FAIR VALUE OF FINANCIAL INSTR34

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Liabilities
Derivative Liability	$ 469
Recurring | Level 1
Assets
Restricted investments in US Treasury Bonds - available for sale, at fair value	1,435	$ 1,422
Recurring | Level 2
Assets
Commodity derivatives		4,005
Liabilities
Derivative Liability	469
Recurring | Fair value
Assets
Restricted investments in US Treasury Bonds - available for sale, at fair value	1,435	1,422
Commodity derivatives		$ 4,005
Liabilities
Derivative Liability	$ 469

DERIVATIVE FINANCIAL INSTRUME35

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Jun. 30, 2015 - Commodity derivatives	MMBTU / dbbl / d$ / Mcf$ / bbl
Oil | Swap | 07/01/15- 09/30/15
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	1,300
Price per Mcf or Bbl	49.75
Oil | Swap | 07/01/15- 09/30/15 period two
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	400
Price per Mcf or Bbl	56.82
Oil | Swap | 10/01/15 - 03/31/16
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	250
Price per Mcf or Bbl	62.92
Oil | Collar | 10/01/15 - 03/31/16
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	500
Oil | Collar | 10/01/15 - 03/31/16 | Minimum
Derivative financial instruments
Price per Mcf or Bbl	50
Oil | Collar | 10/01/15 - 03/31/16 | Maximum
Derivative financial instruments
Price per Mcf or Bbl	64
Oil | Collar | 07/01/16- 06/30/16
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	250
Oil | Collar | 07/01/16- 06/30/16 | Minimum
Derivative financial instruments
Price per Mcf or Bbl	55
Oil | Collar | 07/01/16- 06/30/16 | Maximum
Derivative financial instruments
Price per Mcf or Bbl	69.97
Oil | Collar | 07/01/16- 12/31/16
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	500
Oil | Collar | 07/01/16- 12/31/16 | Minimum
Derivative financial instruments
Price per Mcf or Bbl	50
Oil | Collar | 07/01/16- 12/31/16 | Maximum
Derivative financial instruments
Price per Mcf or Bbl	71.50
Oil | Collar | 10/01/15- 12/31/15
Derivative financial instruments
Volume in BBl or MMBtu per day | bbl / d	500
Oil | Collar | 10/01/15- 12/31/15 | Minimum
Derivative financial instruments
Price per Mcf or Bbl	50
Oil | Collar | 10/01/15- 12/31/15 | Maximum
Derivative financial instruments
Price per Mcf or Bbl	68.15
Natural Gas | Swap | 07/01/15- 12/31/15
Derivative financial instruments
Volume in BBl or MMBtu per day | MMBTU / d	3,000
Price per Mcf or Bbl | $ / Mcf	4.16
Natural Gas | Swap | 07/01/15- 10/31/15
Derivative financial instruments
Volume in BBl or MMBtu per day | MMBTU / d	10,000
Price per Mcf or Bbl | $ / Mcf	3.18
Natural Gas | Swap | 07/01/15- 10/31/15 period two
Derivative financial instruments
Volume in BBl or MMBtu per day | MMBTU / d	10,000
Price per Mcf or Bbl | $ / Mcf	3.14
Natural Gas | Swap | 07/01/15- 12/31/15 period two
Derivative financial instruments
Volume in BBl or MMBtu per day | MMBTU / d	15,000
Price per Mcf or Bbl | $ / Mcf	2.92
Natural Gas | Swap | 07/01/15- 03/31/16
Derivative financial instruments
Volume in BBl or MMBtu per day | MMBTU / d	5,000
Price per Mcf or Bbl | $ / Mcf	3.02

DERIVATIVE FINANCIAL INSTRUME36

DERIVATIVE FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Amount of gains (losses) recognized in income from derivative instruments not designated as hedging instruments
Total	$ (3,300)	$ (1,668)	$ 661	$ (2,661)
Commodity derivatives | Not designated as hedging instruments
Amount of gains (losses) recognized in income from derivative instruments not designated as hedging instruments
Realized cash settlements on hedges	1,137	(1,477)	5,135	(3,278)
Mark-to-market gain (loss) on hedges	(4,437)	(191)	(4,474)	617
Total	$ (3,300)	$ (1,668)	$ 661	$ (2,661)

DERIVATIVE FINANCIAL INSTRUME37

DERIVATIVE FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair value of net derivatives
Derivative Assets, current		$ 4,005
Derivative Liabilities, current	$ 408
Derivative Liabilities, Non-current	61
Derivative Liabilities	469
Commodity derivatives | Not designated as hedging instruments
Fair value of net derivatives
Derivative Assets	1,073	4,005
Derivative Liabilities	1,542
Commodity derivatives | Not designated as hedging instruments | Natural Gas
Fair value of net derivatives
Derivative Assets, current	1,073	3,611
Commodity derivatives | Not designated as hedging instruments | Oil
Fair value of net derivatives
Derivative Assets, current		$ 394
Derivative Liabilities, current	1,481
Derivative Liabilities, Non-current	$ 61

ACQUISITIONS (Details)

ACQUISITIONS (Details) - Marcellus Assets $ / shares in Units, $ in Thousands, shares in Millions	Aug. 11, 2014USD ($)itemshares	Jun. 30, 2014USD ($)$ / shares	Jun. 30, 2014USD ($)$ / shares	Dec. 31, 2014USD ($)
ACQUISITIONS
Number of other working interest owners | item	2
Number of shares exchanged | shares	6.7
Common stock issued	$ 41,400
Purchase price
Cash consideration	312,500
Fair value of Warren equity common shares	41,400
Closing adjustments	(7,828)
Fair value of earn-out provision	6,340
Fair value of farm-out provision	3,410
Total purchase price	355,822
Maximum payout included as part of the purchase and sale agreement	$ 8,500
Probability percentage of achieving the full payout	90.00%
Fair values of the assets acquired and liabilities assumed
Proved oil and gas properties				$ 171,070
Unproved oil and gas properties				184,752
Total purchase price				$ 355,822
Unaudited Pro Forma Condensed Combined Financial Information
Revenues		$ 58,522	$ 121,081
Income from Operations		21,773	46,283
Net income		$ 21,691	$ 29,433
Diluted net income per share | $ / shares		$ 0.27	$ 0.37

CAPTILIZED INTEREST (Details)

CAPTILIZED INTEREST (Details) - Jun. 30, 2015 - USD ($) $ in Millions	Total	Total
Senior Notes
Interest Costs Capitalized	$ 3.4	$ 6.6

RECENT DEVELOPMENTS (Details)

RECENT DEVELOPMENTS (Details) - Jun. 16, 2015 - Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] $ in Millions	USD ($)a
Interests in shallow depth coal bed methane assets
Total purchase price	$ 47
Payable in cash	$ 42
Interest in certain deep rights associated with former leases in the Atlantic Rim area
Sale of undivided interest in certain deep rights, percentage of ownership before transaction	30.00%
Percentage of the operated deep rights associated with former leases in the Atlantic Rim area after transaction	70.00%
Area of Land | a	68,700

Uncategorized Items - wres-2015

Label	Element	Value
Net Income (Loss) Attributable to Parent	us-gaap_NetIncomeLoss	$ (85,276)
Net Income (Loss) Attributable to Parent	us-gaap_NetIncomeLoss	$ 10,754