DENVER, March 10, 2016 (GLOBE NEWSWIRE) —
Nasdaq Listing
Warren Resources, Inc. (Nasdaq:WRES) (“Warren”) today announced that on March 7, 2016, it received a decision letter from the Nasdaq Hearings Panel (the “Panel”) indicating that Warren’s common stock is permitted to continue to trade on the Nasdaq Global Market through June 20, 2016.
The continued listing of Warren’s common stock is contingent on Warren (i) providing the Panel with an update regarding its restructuring efforts on or before April 20, 2016 and (ii) completing a reverse stock split that results in a minimum closing bid price of $1.00 for a minimum of ten consecutive trading days prior to June 20, 2016. The Panel noted that it may, at its discretion, require that the minimum closing bid price of $1.00 be met for greater than ten trading days. The Panel’s decision is subject to review of the Nasdaq Listing and Hearing Review Council, which may affirm, modify, reverse, dismiss or remand the decision of the Panel.
The Panel informed Warren that, if Warren is unable to maintain compliance with the minimum bid requirement prior to June 20, 2016, the Panel will issue a final delist determination and immediately suspend all trading in Warren’s common stock.
James A. Watt, Warren’s President and CEO, commented “Warren would like to thank the NASDAQ for their support as we strive restructure Warren’s balance sheet, but we caution investors that we cannot provide any assurance that Warren will be able to achieve a restructuring of its debt outside of a bankruptcy proceeding.”
Debt Restructuring
Warren continues to engage in discussions with its creditors regarding a restructuring of its debt obligations. As of December 31, 2015, Warren’s first lien creditors held debt of $235 million in principal amount, second lien creditors held debt of $51 million in principal amount, and investors held $167 million principal amount of Warren’s unsecured senior notes. Warren had $26.8 million in cash at year end 2015.
In light of prevailing oil prices and the necessity of a debt restructuring, Warren elected to not make the approximately $7.5 million interest payment due February 1, 2016 on its unsecured senior notes. The applicable 30-day grace period for such interest payment has expired, and consequently an event of default under the indenture governing such notes has occurred and is continuing. This status gives the indenture trustee and the holders of not less than 25% in aggregate principal amount of the unsecured notes the right declare the entire principal amount of the notes plus accrued and unpaid interest due and payable. In addition, this status has resulted in events of default under Warren’s first lien credit facility and its second lien credit facility, entitling the administrative agents and lead lenders thereunder to declare all obligations under those credit facilities to be immediately due and payable. However, thus far, no such acceleration of Warrens debt obligations has occurred.
Although Warren is continuing to seek a workable agreement regarding a consensual, out-of-court restructuring of its indebtedness, a failure to achieve such an agreement will likely necessitate seeking protection from its creditors through a bankruptcy proceeding, in order to preserve and maximize value for its stakeholders. Furthermore, Warren and its lenders are continuing to evaluate whether a consensual restructuring should be effected outside or through a bankruptcy proceeding.
Mr. Watt commented, “We have made progress in our discussions with our lenders, and we are hopeful that all our creditors will cooperate in reaching a viable solution addressing the reality of low oil prices and our realistic debt service capacity. Once we achieve a rational capital structure, I am optimistic regarding market opportunities to build stakeholder value.”
About Warren Resources
Warren Resources, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of domestic oil and natural gas reserves. Warren’s activities are primarily focused on oil in the Wilmington field in the Los Angeles Basin in California, natural gas in the Marcellus Shale in Pennsylvania, and the Washakie Basin of Wyoming.
