New York, NY-based
Warren Resources Inc.
) announced the closure of its $300 million aggregate principal
amount of 9% senior notes due 2022 at a price of 98.617% of par, in
a private placement.
The energy explorer used the net proceeds from this offering to
part finance the $312.5 million cash portion for its recently
concluded assets acquisition in Pennsylvania's Marcellus Shale -
from Colorado-based oil and natural gas producer, Citrus Energy
Corp. and two other parties that owned working interest in the
region - for $352.5 million.
Warren Resources, which went public in 2004, is a publicly traded
exploration and production company engaged in the acquisition,
finding and development of oil and gas properties in the U.S. The
company's operations are concentrated primarily in the liquids-rich
acreage of the Wilmington field in the Los Angeles Basin in
California and natural gas production in the Washakie Basin in
With a proven exploration strategy, a track record of growing
production and a robust hedging program that minimizes commodity
price exposure, Warren resources is primed for attractive returns.
Moreover, the company's balanced asset portfolio, together with a
business model focused on operational efficiencies and attractive
acquisitions/growth projects, makes the oil and gas finder a good
choice for investors looking for substantial value.
However, as is the case with other exploration and production
firms, Warren Resources' results are directly exposed to oil and
gas prices, which are inherently volatile and subject to complex
market forces. Realized prices could differ significantly from our
estimates, thereby affecting the company's revenues, earnings and
As a result, Warren Resources currently retains a Zacks Rank #3
(Hold), implying that it is expected to perform in line with the
broader U.S. equity market over the next one to three months.
However, some better-ranked domestic upstream energy stocks include
RSP Permian Inc. (
), Cheniere Energy Inc. (
) and Clayton Williams Energy Inc. (
). All the firms hold a Zacks Rank #1 (Strong Buy).
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WARREN RSRCS (WRES): Free Stock Analysis Report
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