Banpu/Kalnin Buys 5,289 Ac & 35 Wells in NEPA Marcellus for $105M

Banpu Pcl, Thailand’s largest coal producer, in cooperation with their American-based partner Kalnin Ventures, has just snapped up their sixth piece of the Marcellus Shale–once again in northeast Pennsylvania. Kalnin announced this morning they have cut a deal, using $105 million of Banpu’s money, to buy an unspecified amount of Marcellus acreage and 35 producing shale wells in Wyoming County, PA from Warren Resources. Based on a previous Kalnin story, yesterday’s announcement, and the Warren Resources website, MDN believes the total acreage involved is 5,289 net acres (6,982 gross). Which doesn’t seem like much. But you have to view the purchase in context. That $105 million paid is mostly for the producing 35 wells (roughly $3M per well). Plus, the acreage is no doubt adjacent to previous acreage and wells Kalnin/Banpu bought in Wyoming County back in May (see Thai Company Banpu Invests in Another 34 Marcellus Wells in NEPA). It was just last week we spotted and highlighted a story that quotes Banpu’s CEO Somruedee Chaimongkol as saying her company is considering “putting more money on top of the $500 million” already committed for shale gas purchases in the Marcellus (see Thailand’s Banpu Looking to Invest More Money in NEPA Marcellus). The “considering” period didn’t last long! This sixth investment now puts Banpu’s investment stake in the NEPA Marcellus at $522 million, with no end in sight…
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Thai Company Banpu Invests in Another 34 Marcellus Wells in NEPA

One year ago, Banpu Pcl, Thailand’s largest coal producer, invested $112 million to purchase Range Resources’ Marcellus non-operated JV operations in Bradford County, PA (see Thai Company Buys Out Range Resources’ JV in NEPA for $112M). The “Chaffee Corners Joint Exploration Agreement” gave Banpu an ownership share in 62 producing wells and another 14 wells waiting on completion, and a share in 170+ more drilling locations. Talisman is the operator of the wells and the company that does the drilling (Banpu is just an investor). Banpu liked it so much, they did it again in January of this year (see Thai Company Banpu Makes 2nd Investment in Northeast Marcellus). The January deal gave Banpu a 10.24% stake in 10,000 acres of Marcellus leases, once again in northeastern PA, for $63 million. Chief Oil & Gas is the driller on the acreage in the second deal. Then in March, Banpu signed an agreement to invest $16 million into a venture with Tug Hill Marcellus (see Thai Company Banpu Invests Another $16M in PA Marcellus Wells). It seems that Banpu can’t get enough of the Marcellus in northeastern PA. The company just announced a fourth deal to invest in more NEPA acreage and wells. How many wells? What county is the new deal located in? And which driller is the operator of that acreage? We give you the details you won’t find elsewhere…
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Warren Resources Exits Bankruptcy, Turned $545M Debt into Equity

Warren ResourcesWarren Resources, a small driller that drilled and brought online their first two Marcellus Shale wells last year, is based in Houston and operates in California, Colorado, Wyoming and Pennsylvania. In February MDN told you that Warren missed an important $7.5 million payment, the first ominous signal of what was to come (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). The next week the company announced no new drilling, anywhere, in 2016–hinting they might have to file for bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). That happened, in June (see Warren Resources Files for Bankruptcy, Wiping Out Stockholders). Yesterday Warren announced it has emerged from bankruptcy proceedings and ready to continue on. Warren had over $545 million in debt that they magically waved the bankruptcy wand over and turned into equity (stock ownership). In the process, previous stockholders/owners got nothing–their shares became worthless…
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List of 85 Bankrupt O&G Companies Since 2015; 4 in Marc/Utica

Haynes BooneIn November 2015 MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). In April, just three short months ago, the list stood at 59 bankruptcies (see List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016). The law firm compiling the list, Haynes and Boone, keeps updating the list. The most recent version was issued on June 30 and it shows the list growing to 85 declared bankruptcies, with more on the way. As of April we noted there was only one Marcellus/Utica driller on the list–Magnum Hunter Resources–which has since emerged from Chapter 11 and is once again up and running. However, in the latest list of 85 bankruptcies, we now must add three more companies with operations in the Marcellus/Utica…
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Warren Resources Files for Bankruptcy, Wiping Out Stockholders

Warren ResourcesWarren Resources, a small driller that drilled and brought online their first two Marcellus Shale wells last year, is based in Houston and operates in California, Colorado, Wyoming and Pennsylvania. In February MDN told you that Warren missed an important $7.5 million payment, the first ominous signal of what was to come (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). The next week the company announced no new drilling, anywhere, in 2016–hinting they might have to file for bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). In March the New York Stock Exchange threatened to de-list Warren’s stock (see Pretty in Pink? Warren Resources Put on Notice for Stock Delisting). In April, the board changed the definition and role of the company’s CEO to become CRO–Chief Restructuring Officer–a sure sign of what was ahead (see Warren Resources Preps for Bankruptcy, New Role for CEO). Indeed, this one was pretty easy to predict. Last week Warren filed for Chapter 11 bankruptcy protection and has worked out a deal to transfer ownership of the company to two debt-holders: 82.5% of the company will now be owned by GSO Capital (owed $248 million), and the rest will go to Claren Road Asset Management (owed $57 million). Claren isn’t happy with the deal. Current/existing stockholders? They get zip. Wiped out. Screwed. That’s how it works in our great country–debt-holders get to take over and equity-holders (i.e. owners) get taken to the cleaners…
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Warren Resources Preps for Bankruptcy, New Role for CEO

We’ve heard of a Chief Executive Officer (CEO), a Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Marketing Officer (CMO) and Chief Risk Officer (CRO). But until now, we’d never heard of a Chief Restructuring Officer. Somebody who’s full-time job it is to work on keep the company from shutting its doors and liquidating the assets. Warren Resources has just appointed it’s current CEO and President, James Watt, as the company’s Chief Restructuring Officer. In February MDN reported that Warren–a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale–had missed a $7.5 million payment (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). At the time, Warren said if the company could not come to a workable agreement regarding an out-of-court restructuring, it would have to seek protection from its creditors through a bankruptcy proceeding. In Warren’s announcement yesterday, they once again warned of potential bankruptcy–for the third time. Without saying outright “we’re about to file for bankruptcy,” the company issued a very clear and loud signal that’s just what they’re about to do…
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Warren Resources 2015: Lost $620M, Most of it a Paper Loss

As MDN pointed out in February, Warren Resources is on the cusp of bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). They are a small driller–at least in the Marcellus–having drilled two Marcellus wells last year. Earlier this month we brought you the news that the NASDAQ Stock Exchange is threatening to stop trading the company’s stock (see Pretty in Pink? Warren Resources Put on Notice for Stock Delisting). Last week Warren issued its fourth quarter and full year 2015 update. It’s fairly short and to the point: last year Warren lost $620 million. Most of that loss was a paper loss–$578M for impairments. Unlike other drillers, Warren doesn’t include a copy of their financial spreadsheets with their announcement. They make you go fishing on the Securities and Exchange Commission website to find their financial information. It appears they’re making it intentionally difficult to easily obtain the information…
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Pretty in Pink? Warren Resources Put on Notice for Stock Delisting

As MDN pointed out last month, Warren Resources is on the cusp of bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). They are a small driller (drilled two Marcellus wells last year), and they’re trying their hardest–but it’s tough out there. Add one more problem to the pile for Warren. The company’s stock is currently traded on the NASDAQ stock exchange. NASDAQ has let Warren know that unless the company can get the stock price above $1 for ten consecutive days by June 20th, they will be delisted. Meaning they become a penny stock traded on what is known as the pink sheets. The last time the stock was $1 or above was May 2015. We hope they like the color pink…
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Warren Resources: Potential Bankruptcy, No Drilling in 2016

Last week MDN told you of a troubling sign at Warren Resources–the company had missed a $7.5 million payment on notes (IOUs) and the clock is now ticking (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). Yesterday Warren released information on 2015 reserve and production figures. As part of that update, they say this: “If Warren cannot come to a workable agreement regarding an out-of-court restructuring, it will have to seek protection from its creditors through a bankruptcy proceeding in order to preserve and maximize value for its stakeholders” (emphasis added). In other words, if the people they owe money to don’t back off, the only choice left is to declare bankruptcy. Warren also said yesterday they won’t spend a penny on drilling in 2016…
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Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking

Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, announced yesterday they won’t (for now) make a $7.5 million in payments due on IOUs (i.e. notes) that are due to be made this month. Even though they claim to have enough money in the bank. Big red flag. Instead, Warren has hired investment bank Jeffries LLC to help the company with “potential restructuring of its balance sheet” and the company has “initiated restructuring discussions with representatives of the creditors under its first and second lien credit facilities.” Restructuring is a cheaper and (if you can swing it) better alternative than bankruptcy. The question is, will Warren’s restructuring be enough to keep the company out of bankruptcy proceedings? The terms of missing the payment allow a 30-day grace period before bad stuff begins to happen. The clock is ticking…
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Warren Resources Announces Departures/New Appointments in Key Roles

In November, MDN told you that Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, had finally chosen a new CEO nearly a year after the previous CEO abruptly resigned (see After Almost a Year, Warren Resources Gets New CEO). Yesterday Warren announced further “restructuring”–by which they mean “out with the old team, in with the new team.” In addition to a new CEO Warren has a new CFO and now a new VP for Accounting. The people who have been occupying those roles will be leaving the company by March. Here’s the details of the house-cleaning at Warren Resources…
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After Almost a Year, Warren Resources Gets New CEO

Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, recently moved their headquarters from New York City to Denver, Colorado (see Warren Resources Says Bye-Bye to NYC Headquarters, Hello Denver). Warren’s Marcellus program is small–very small. They spent just $3.8 million in 3Q15 to complete two “upper” Marcellus wells (see Warren Res. 3Q15: $190M Paper Loss, Completes 2 Upper Marcellus Wells). However, they remain active in the Marcellus and may one day expand their activity here, so we keep tabs on them. The company is facing some serious challenges. Last December Warren’s CEO and Chairman of the Board, Philip Epstein, suddenly quit (see CEO of Warren Resources Quits, Replaced by Citrus Energy CEO). Since Epstein’s departure, Citrus Energy CEO Lance Peterson (a Warren board member) had taken the reigns as interim CEO. The search is now over and Warren has just announced the appointment of a new CEO…
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Warren Res. 3Q15: $190M Paper Loss, Completes 2 Upper Marcellus Wells

Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, issued their third quarter 2015 update and held an analyst call earlier this week. The company experienced a $189.5 million loss for the quarter, most of that being a paper loss due to writing down the value of assets (the pattern we’ve seen with almost every other Marcellus/Utica driller in 3Q15). Warren only spent $3.8 million in the Marcellus in 3Q15–to finish two drilled “Upper Marcellus” wells (see Warren Resources Releases Details on 2 “Upper” Marcellus Wells). Below are select portions of both the 3Q15 press release update and from the analyst conference call transcript…
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Warren Resources Says Bye-Bye to NYC Headquarters, Hello Denver

Goodbye New YorkWarren Resources, a small, independent exploration and production company has been headquartered in New York City–until now. Warren has ongoing drilling programs in California, Wyoming, and in the Pennsylvania Marcellus Shale. Warren’s Marcellus program is very small–they previously announced they would drill and complete two Marcellus wells in 2015. In July the company began a search for a new CEO, a process that continues (see Help Wanted: Warren Resources Launches Search for New CEO). Warren announced yesterday that effectively immediately their formerly branch office in Denver, Colorado will become the company’s new headquarters–and that they will close down the New York City and Roswell, New Mexico offices in the coming months. Apparently it will save quite a bit of money on rent…
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Warren Resources Releases Details on 2 “Upper” Marcellus Wells

Warren Resources is an independent exploration and production company (E&P, or what we call a driller) with an active drilling program for oil in California, undrilled acreage in the state of Wyoming, and a small but growing operation in the Marcellus Shale. Warren owns 6,982 gross (5,289 net) contiguous acres in Wyoming County, PA, the northeastern part of the state. As of July 2014 Warren had drilled 30 Marcellus Shale wells (some of those drilled by a joint venture partner) in what they call the Lower Marcellus layer. Earlier this year the company drilled two new Marcellus wells in the Upper Marcellus layer. On Tuesday, Warren released initial production results for their first two Upper Marcellus Shale wells…
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Warren Resources Boasts Lowest Breakeven Cost in Marcellus

Last week MDN told you that Warren Resources, a small, independent exploration and production company headquartered in New York City with a very small Marcellus drilling program (just two wells this year) is looking for a new CEO (see Help Wanted: Warren Resources Launches Search for New CEO). Warren Resources also issued an operations update last week. The update shows Warren is done drilling their two planned Marcellus Shale wells for 2015 and has now begin the completions process, which is expected to be done sometime in August. Below is the introduction and Marcellus portions of Warren’s operational update from last week, which includes the boast that Warren has the lowest breakeven cost in the Marcellus…
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