Each one in plain English, with the numbers worked through for a shareholder.
22 June 2007asset acquisition disposition● NeutralMajor
On June 20, 2007 Warren bought the oil and gas interests of five Delaware limited partnerships it manages (formed 2000-2003) in Wyoming, Texas and California. It paid with about 3.48 million restricted shares priced at $10.80 (a 20% discount to a $13.50 average), with asset prices ranging from $3.6 million to $12.6 million per partnership, and assumed their environmental and well-plugging liabilities. The properties have about 9.9 Bcfe of estimated proved developed producing reserves, and the sellers have requested registration of the shares for resale, so existing shareholders are diluted. The filing lists 3,482,074 shares in one place and 3,482,076 in another.
Warren announced it issued a press release on January 25, 2007 giving 2006 oil and gas production and an operational update. The press release text is not included in the filing provided, so no production figures can be reported here.
After an independent director who sat on the audit committee resigned (reported December 29, 2006), NASDAQ noted on January 11, 2007 that the audit committee had only two independent members. Director Dominick D'Alleva joined the committee effective January 1, 2007, and on January 18, 2007 NASDAQ confirmed Warren is back in compliance, so the issue is resolved.
Warren E&P hired Bruce Berwager as Senior Vice President and General Manager – California, effective November 14, 2006, at a $265,000 salary with a $75,000 signing bonus, 50,000 options at $12.53 and a bonus of up to 75% of salary. He will run drilling and production at the Wilmington Townlot Unit and North Wilmington Unit fields. If he leaves after a change of control he gets a lump sum equal to a year's salary and his options vest immediately.
Effective November 16, 2006 Warren signed a revolving credit agreement with JPMorgan Chase as agent, allowing borrowing up to the lesser of the borrowing base, $150 million, or the amount Warren requests; the initial borrowing base is $40 million and it matures November 15, 2011. It is secured by substantially all assets and guaranteed by two subsidiaries, with covenants including a minimum current ratio of 1.0 and maximum net debt to EBITDAX of 3.5. This is Warren's first debt facility in the record; the CFO's press-release quote says it funds the 2007 capital budget including Wilmington and Atlantic Rim.
Warren completed the purchase of oil and gas properties in Wyoming and California from two affiliated Delaware limited partnerships for $7.5 million ($7.1 million net of Warren's own partnership interests), paid as $2.7 million cash and $4.4 million in 383,072 restricted shares priced at $11.49. The properties carry about 1.7 Bcfe of estimated proved reserves, and Warren assumed their environmental and well-plugging liabilities and must seek registration of the shares for resale within a year of closing. Separately, the filing updates the old Gotham Insurance case: on April 26, 2006 the Texas Court of Appeals reversed the $1.8 million restitution award against Warren and the attorneys' fees award and sent the matter back to the trial court, so the earlier $1.8 million liability is not finally settled.
On December 9, 2005 Warren agreed to buy the North Wilmington Unit oil field in the Los Angeles Basin from Global Oil Production, LLC and Wilmington Management, LLC for $23 million cash, including 100% of the working interests (subject to about 15.5% royalty burdens). Closing was expected December 30, 2005, subject to customary conditions and price adjustments. The company's press release estimates 19.8 million barrels of oil equivalent of proved reserves net to Warren (1.7 million developed producing, 18.1 million undeveloped) and about 338 barrels a day net production; this adds a California oil asset alongside the Wyoming coalbed methane acreage.
On June 17, 2005 the company amended the employment agreements of CEO Norman Swanton (base salary $500,000) and CFO Timothy Larkin ($275,000), and signed new agreements with Lloyd Davies ($250,000) and David Fleming ($265,000). Davies and Fleming get severance on termination without cause and a lump sum equal to annual base salary if they leave after a change of control; their terms run through December 31, 2005 with automatic yearly renewal.
On December 16, 2004 the company signed an underwriting agreement with KeyBanc Capital Markets for its initial public offering of 9,500,000 shares, with an option for up to 1,425,000 more; a December 22 press release reports the offering was completed. This follows the December 2004 private placement, and insiders agreed to a 180-day lockup. The filing gives no offering price or proceeds.
1 Dec 2004capital raising announcement● NeutralMajor
On December 1, 2004, the company (now shown as a Maryland corporation, a change from Delaware not explained in this filing) raised $21 million in a private placement, selling 3 million units to institutional investors. Each unit is a share plus five-year warrants at $10 and $12.50 (750,000 shares each), which dilutes existing holders if exercised; placement fees were $507,500. The company must register the shares for resale and would issue extra warrants if its stock has not begun public trading within a year.
24 Dec 2002asset acquisition disposition▲ GoodMajor
On December 13, 2002, the company closed a deal with Anadarko covering the Atlantic Rim coalbed area in Carbon County, Wyoming: Anadarko took an undivided 50% of Warren's interest in the defined joint-venture area (about 134,263 net acres) for $12 million cash, a $6 million deferred obligation (paid as Anadarko covers Warren's share of costs, over three years to July 31, 2005), and a $4,285,902.70 cost reimbursement. Warren and Anadarko each end up with 50% (about 66,361 net acres) in the area, Anadarko becomes operator of record with Warren doing drilling and other work under a services agreement, and Warren keeps 100% of about 64,731 net acres outside the area.
Completing the plan proposed in the 2001 proxy, the company reincorporated from New York to Delaware on September 5, 2002 after shareholders approved it by more than 66-2/3%. Each share converted one-for-one into a Delaware share (par value $0.0001) with no certificate exchange needed, and the filing says business, management and assets are unchanged. The three stock incentive plans were also approved.
On February 14, 2002, the company's indirect subsidiary CJS Pinnacle Petroleum Services sold substantially all its assets to Basic Energy Services for up to $4.2 million: $3.7 million cash plus up to $500,000 in drilling-service credits usable over 36 months. Pinnacle also agreed not to compete in well-servicing within 200 miles of its Beeville, Texas and Artesia, New Mexico offices for three years.
Warren Resources, a New York company, filed a preliminary proxy asking shareholders to approve moving its incorporation to Delaware by merging into a wholly-owned Delaware subsidiary, plus three stock incentive plans. The reincorporation needs a two-thirds vote of the 17,537,579 shares outstanding on the October 31, 2001 record date; the letter says the company is in the process of becoming a publicly-reporting company. Meeting date and place are left blank in this draft.
