UseTable theseof links to rapidly review the document TABLE OF CONTENTS PART IV INDEX TO FINANCIAL STATEMENTS Contents

Index Tableto ofFinancial Contents Statements

UNITED STATES ~~SECURITIES~~ ~~AND EXCHANGE COMMISSION Washington, D.C. 20549~~

~~FORM~~SECURITIES ~~10-K~~ AND EXCHANGE COMMISSION

ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2015
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Washington, D.C. 20549

FORM ~~COMMISSION FILE NUMBER 000~~10-~~33275~~ K

~~Warren~~☒ ~~Resources, Inc. (Exact~~ANNUAL ~~name~~REPORT ofPURSUANT ~~registrant~~TO asSECTION ~~specified~~13 inOR ~~its charter~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Maryland (State or other jurisdiction of incorporation or organization)		11-3024080 (I.R.S. Employer Identification No.)
1331 17th Street, Suite 720 Denver, Colorado (Address of principal executive offices)		80202 (Zip Code)

For the Fiscal Year Ended December 31, 2016

~~Registrant's telephone~~OR ~~number, including area code: (720) 403-8125~~

~~Securities registered~~☐ ~~pursuant~~TRANSITION toREPORT ~~Section 12~~PURSUANT TO SECTION 13 OR 15(bd) ofOF ~~the~~THE ~~Act:~~SECURITIES EXCHANGE ACT OF 1934

Title of Each Class		Name of Each Exchange on which Registered
Common Stock, $.0001 par value per share		NASDAQ Global Market

COMMISSION FILE NUMBER 000-33275

~~Securities registered~~Warren ~~pursuant to Section~~Resources, ~~12(g)~~Inc. ~~of the Act: None~~

~~Indicate by~~(Exact ~~check~~name ~~mark~~of ~~if the~~ registrant ~~is a well-known seasoned issuer,~~ as ~~defined~~specified in ~~Rule 405~~its ofcharter) ~~the Securities Act. Yes o No ý~~

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý


Delaware		11-3024080
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5420 LBJ Freeway, Suite 600 Dallas, Texas		75240
(Address of principal executive offices)		(Zip Code)

~~Indicate~~Registrant’s bytelephone ~~check~~number, ~~mark~~including ~~whether~~area ~~the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of~~code: ~~1934 during the preceding 12 months~~ (~~or for such shorter period that the registrant was required to file such reports~~214)~~, and (2)~~ ~~has~~393-9688 ~~been subject to such filing requirements for the past 90 days. Yes ý No o~~

~~Indicate~~Securities byregistered ~~check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted~~ pursuant to ~~Rule~~Section ~~405 of Regulation S-T~~ 12(~~§ 232.405~~b) of ~~this chapter) during~~ the ~~preceding~~Act: ~~12 months (or for such shorter period that the~~None ~~registrant was required to submit and post such files). Yes ý No o~~

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý


Title of Each Class		Name of Each Exchange on which Registered
Common Stock, $.01 par value per share		None

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark~~to whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in RuleSection ~~12b-2~~12(g) of the ~~Exchange~~ Act.: None

~~Large~~Indicate ~~accelerated~~by ~~filer~~check omark ~~Accelerated~~if ~~filer~~the oregistrant ~~Non-accelerated~~is ~~filer~~a owell-known ~~(Do~~seasoned ~~not~~issuer, ~~check~~as ifdefined ain ~~smaller~~Rule 405 ~~reporting~~of ~~company)~~the ~~Smaller~~Securities Act. Yes ☐ No ☒ ~~reporting company ý~~

Indicate by check mark ~~whether~~if the registrant is anot ~~shell~~required ~~company~~to ~~(as~~file ~~defined~~reports inpursuant ~~Rule~~to Section ~~12b-2~~13 or Section 15(d) of the Act). Yes o ☐ No ý ☒

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark ofwhether the registrant's ~~common~~(1) has ~~stock~~filed ~~held~~all reports required to be filed by ~~non-~~Section 13 ~~affiliates~~or 15(d) of the ~~registrant~~Securities onExchange ~~June~~Act of 1934 during the preceding 12 ~~30,~~months ~~2015~~(or for such shorter period that the registrant was ~~approximately~~required to file such reports), and (2) has been subject to ~~$35.1~~such filing requirements for the past 90 ~~million~~days. Yes ☐ No ☒

~~The number~~Indicate ofby ~~shares~~check ofmark whether the registrant's ~~common~~has ~~stock~~submitted ~~outstanding~~electronically asand posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of ~~March~~Regulation ~~17,~~S-T ~~2016~~(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was ~~85,249,108~~required ~~shares~~to submit and post such files). Yes ☐ No ☒

~~DOCUMENTS~~Indicate ~~INCORPORATED~~by BYcheck ~~REFERENCE:~~ mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

~~The~~Indicate ~~registrant~~by ~~intends~~check tomark ~~file a~~whether ~~proxy~~the ~~statement~~registrant ~~pursuant~~is toa ~~Regulation 14A~~large ~~not~~accelerated ~~later~~filer, ~~than~~an ~~120 days~~accelerated ~~after~~filer, ~~the~~a non-accelerated ~~close~~filer, ofor ~~the~~a ~~fiscal~~smaller ~~year~~reporting ~~ended December 31, 2015~~company. ~~Portions~~See definitions of ~~such~~“large ~~proxy~~accelerated ~~statement~~filer,” ~~are~~“accelerated ~~incorporated~~filer,” byand ~~reference~~“smaller ~~into~~reporting ~~Part~~company” in Rule ~~III~~12b-2 of ~~this~~the ~~report~~Exchange ~~on Form 10-K~~Act.

~~Table~~Large ofaccelerated ~~Contents~~filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company ☒

Indicate ~~WARREN~~by ~~RESOURCES,~~check mark whether the registrant is a shell company (as defined in Rule ~~INC~~12b-2 of the Act). Yes ☐ No ☒

The ~~FORM~~aggregate 10market value of the registrant’s common stock held by non-K affiliates of the registrant on June 30, 2016 was approximately $1.6 million.

~~TABLE~~The OFnumber ~~CONTENTS~~ of shares of registrant’s common stock outstanding as of April 7, 2017 was 10,000,000 shares.

PART I
Items 1 and 2:	Business and Properties	9
Item 1A:	Risk Factors	35
Item 1B:	Unresolved Staff Comments	64
Item 3:	Legal Proceedings	64
Item 4:	Mine Safety Disclosures	64
PART II
Item 5:	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	65
Item 6:	Selected Consolidated Financial Data	67
Item 7:	Management's Discussion and Analysis of Financial Condition and Results of Operations	67
Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	80
Item 8:	Financial Statements and Supplementary Data	82
Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	82
Item 9A:	Controls and Procedures	82
Item 9B:	Other Information	83
PART III
Item 10:	Directors, Executive Officers and Corporate Governance	84
Item 11:	Executive Compensation	84
Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	84
Item 13:	Certain Relationships and Related Transactions, and Director Independence	84
Item 14:	Principal Accountant Fees and Services	84
PART IV
Item 15:	Exhibits, Financial Statement Schedules	85

DOCUMENTS INCORPORATED BY REFERENCE:

~~Warren's logo~~The isregistrant aintends ~~trademark~~to orfile an ~~service~~amendment ~~mark~~on Form 10-K/A not later than 120 days after the close of ~~Warren.~~the ~~Other~~fiscal ~~trademarks~~year orended ~~service~~December 31, ~~marks~~2016. ~~appearing~~Portions ~~herein~~of such amendment are ~~the~~incorporated ~~property~~by reference into Part III of ~~their~~this ~~respective~~report ~~holders~~on Form 10-K.

As usedTable inof this document, "Warren", "the Company", "we", "us" and "our" refer to Warren Resources, Inc. and its subsidiaries. The term "Warren E&P" refers to our wholly owned subsidiary Warren E&P, Inc. Contents

For abbreviationsIndex or definitions of certain terms used in the oil and gas industry and in this annual report on Form 10-K, please refer to theFinancial section entitled "Glossary of Abbreviations and Terms". Statements

2WARREN RESOURCES, INC.

FORM 10-K ~~Table of Contents~~

TABLE ~~PART~~OF I CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS


PART I
Items 1 and 2:	Business and Properties	10
Item 1A:	Risk Factors	28
Item 1B:	Unresolved Staff Comments	28
Item 3:	Legal Proceedings	29
Item 4:	Mine Safety Disclosures	29
PART II
Item 5:	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	29
Item 6:	Selected Financial Data	30
Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	38
Item 8:	Financial Statements and Supplementary Data	39
Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	39
Item 9A:	Controls and Procedures	39
Item 9B:	Other Information	40
PART III
Item 10:	Directors, Executive Officers and Corporate Governance	40
Item 11:	Executive Compensation	40
Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	40
Item 13:	Certain Relationships and Related Transactions, and Director Independence	40
Item 14:	Principal Accountant Fees and Services	40
PART IV
Item 15:	Exhibits, Financial Statement Schedules	41
Item 16:	Form 10-K Summary	41

~~The~~As ~~statements~~used ~~contained~~ in this ~~annual~~document, ~~report on Form 10-K that are not historical are "forward-looking statements~~“Warren”," ~~as that term is defined in Section 27A of~~ “the ~~Securities~~Company”, ~~Act of 1933~~“we”, as“us” ~~amended~~and ~~(the~~“our” ~~"Securities~~refer ~~Act")~~to ~~and Section~~Warren Resources, ~~21E~~Inc. ofand ~~the~~its ~~Securities~~subsidiaries. ~~Exchange~~The ~~Act~~term of“Warren ~~1934,~~E&P” asrefers ~~amended~~to ~~(the~~our ~~"Exchange~~wholly ~~Act"), that~~owned ~~involve~~subsidiary aWarren ~~number of risks and uncertainties~~E&P, Inc.

~~These~~Warren’s ~~forward-looking~~logo ~~statements~~is ~~include,~~a ~~among~~trademark ~~others,~~or service mark of Warren. Other trademarks or service marks appearing herein are the ~~following:~~property of their respective holders.

~~These~~For ~~statements~~abbreviations ~~may~~or bedefinitions ~~found~~of ~~under~~certain ~~"Risk~~terms ~~Factors,"~~used ~~"Management's~~in ~~Discussion~~the ~~and~~oil ~~Analysis of Financial Condition~~ and ~~Results~~gas ofindustry ~~Operations," "Business~~ and ~~Properties"~~in ~~and other sections of~~ this annual report on Form 10-K~~. Forward-looking statements are typically identified by use of terms such as "may~~," ~~"will,"~~please ~~"could,"~~refer ~~"should,"~~to ~~"expect,"~~the ~~"plan,"~~section ~~"project,"~~entitled ~~"intend," "anticipate,"~~“Glossary ~~"believe," "estimate," "predict," "potential," "pursue," "target" or "continue," the negative~~ of ~~such~~Abbreviations ~~terms~~and ~~or other comparable terminology, although some forward-looking statements may be expressed differently~~Terms”.

~~The forward-looking~~2 statements contained in this annual report on Form 10-K are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this annual report on Form 10-K are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to a number of factors, including:

3Table of Contents

TableIndex ofto ContentsFinancial Statements

~~You should~~PART ~~also~~I consider carefully the statements under "Risk Factors" and other sections of this annual report on Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements.

~~All forward-looking~~CAUTIONARY ~~statements~~STATEMENT ~~speak~~REGARDING ~~only as of the date of this annual report on Form 10~~FORWARD-K.LOOKING WeSTATEMENTS do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

The statements contained in this annual report on Form 10-K that are not historical are “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the ~~Glossary~~“Exchange Act”), that involve a number of ~~Abbreviations~~risks and ~~Terms~~ uncertainties.

~~The~~These ~~following~~forward-looking ~~are~~statements ~~abbreviations~~include, ~~and~~among ~~definitions~~others, ~~of certain terms commonly used in~~ the ~~oil and gas industry and this annual report on~~ ~~Form 10-K~~following:

~~Bbl. One~~• ~~stock~~our ~~tank~~ability ~~barrel,~~to orsuccessfully 42and ~~U.S.~~economically ~~gallons~~acquire, ~~liquid volume~~explore, ~~used~~develop inand ~~reference~~produce to oil orand ~~other~~natural ~~liquid~~gas ~~hydrocarbons.~~ resources;

~~Bbl/d. One~~• ~~Bbl~~our ~~per~~ability ~~day.~~to obtain governmental and other permits and approvals;

~~Bcf. One~~• ~~billion~~the ~~cubic~~actual ~~feet~~or ofpotential ~~natural~~impact ~~gas~~of atenvironmental ~~standard~~and ~~atmospheric~~other ~~conditions.~~governmental regulation;

4• our exploration and development drilling prospects, inventories, projects and programs;

~~Table~~• ofour ~~Contents~~oil and natural gas reserve estimates;

~~Bcfe. One~~• ~~billion~~volatility ~~cubic~~in ~~feet~~commodity ~~equivalent~~prices ofand ~~natural~~market ~~gas,~~conditions ~~calculated~~for ~~by converting~~ oil toand ~~equivalent~~natural ~~Mcf at a ratio of 6 Mcf to 1 Bbl of oil.~~ gas;

~~Boe. Barrels~~• ofour ~~oil~~liquidity ~~equivalent,~~and ~~with~~ability ~~six~~to ~~thousand~~finance ~~cubic~~our ~~feet~~acquisition, ofexploration ~~natural~~and ~~gas~~development ~~being~~operations ~~equivalent~~and ~~to one barrel of oil.~~ activities;

~~Btu~~• orour ~~British~~future ~~thermal~~production, ~~unit. The~~revenue, ~~quantity~~operating ofcosts ~~heat~~and ~~required~~results ~~to raise the temperature~~ of ~~one pound of water by one degree Fahrenheit.~~ operations;

~~Coalbed~~• ~~methane (CBM). Natural gas formed as a byproduct of~~ the ~~coal~~cost ~~formation process, which is trapped in coal seams~~ and ~~produced~~availability ~~by non-traditional~~of ~~means.~~experienced labor;

~~Completion. The~~• ~~installation~~our ofbusiness ~~permanent~~and ~~equipment~~growth ~~for the production of oil or natural gas, or, in the case of a dry well, to reporting to the appropriate authority that the well has been abandoned.~~ strategies;

~~Condensate. Liquid~~• ~~hydrocarbons~~our ~~associated~~identified ~~with~~drilling ~~the production of a primarily natural gas reserve.~~ locations;

~~Developed~~• ~~Acreage. The~~availability ~~number~~and costs of ~~acres~~drilling ~~which~~rigs, ~~are~~equipment ~~allocated~~and orfield ~~assignable to producing wells or wells capable of production.~~ services;

~~Development~~• ~~well. A~~our ~~well~~ability ~~drilled into a proved natural gas or oil reservoir~~ to ~~the~~make ~~depth~~and ofintegrate aacquisitions; ~~stratigraphic horizon known to be productive.~~ and

~~Dewatering. A~~• ~~coalbed~~our ~~methane~~ability well typically begins dewatering with almost all water production and little, or no, natural gas production. The continuous production of water from a well that is dewatering reduces the water reservoir pressure on the coals. The reduced reservoir pressure enables the release of the gas within the coal to ~~the wellbore.~~effectively ~~This~~manage ~~results~~our inareas ~~an increase in the amount~~ of ~~gas production relative to the amount of water production~~operations. ~~Dewatering ceases when peak gas production is reached.~~

~~Dry~~These ~~hole~~statements ormay ~~well. An~~be ~~exploratory,~~found under ~~development,~~“Management’s orDiscussion ~~extension~~and ~~well~~Analysis ~~that~~of ~~proves~~Financial toCondition beand ~~incapable~~Results of ~~producing~~Operations,” ~~either~~“Business ~~oil~~and orProperties” ~~gas~~and ~~in sufficient~~other ~~quantities~~sections of this annual report on Form 10-K. toForward-looking ~~justify~~statements ~~completion~~are typically identified by use of terms such as an“may,” ~~oil~~“will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target” or ~~gas~~“continue,” ~~well~~the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.

~~Environmental~~The ~~assessment~~forward-looking ~~(EA)~~statements contained in this annual report on Form 10-K are largely based on our expectations, which reflect estimates and assumptions made by our management. A ~~public~~These ~~document~~estimates ~~that~~and ~~analyzes~~assumptions areflect ~~proposed~~our ~~federal~~best ~~action~~judgment ~~for~~based ~~the~~on ~~possibility~~currently ofknown ~~significant~~market ~~environmental~~conditions ~~impacts~~and other factors. ~~The~~ ~~analysis~~Although iswe ~~required~~believe bysuch ~~the~~estimates ~~National~~and ~~Environmental~~assumptions ~~Policy~~to ~~Act~~be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. IfIn addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the ~~environmental~~forward-looking ~~impacts~~statements contained in this annual report on Form 10-K are not guarantees of future performance, and we cannot assure any reader that such statements will be ~~significant,~~realized or the ~~federal~~forward-looking ~~agency~~events ~~must~~and ~~then~~circumstances ~~prepare~~will anoccur. ~~environmental~~Actual ~~impact~~results ~~statement.~~may differ materially from those anticipated or implied in the forward-looking statements due to a number of factors, including:

~~Environmental~~• ~~impact~~commodity ~~statement~~price ~~(EIS). A detailed statement of the environmental effects of a proposed action and of alternative actions that is required for all major federal actions.~~ volatility;

~~Exploitation. The~~• ~~continuing~~potential ~~development~~adverse effects of aour ~~known~~emergence ~~producing~~from ~~formation~~Chapter in11 aCases ~~previously~~(as ~~discovered~~defined ~~field.~~below) Toon ~~make~~our ~~complete~~liquidity, orresults ~~maximize the ultimate recovery~~ of ~~oil or natural gas from the field by work including development wells~~operations, ~~secondary~~brand ~~recovery~~or ~~equipment~~business orprospects ~~other~~and ~~suitable~~our ~~processes~~ability ~~and~~to ~~technology.~~operate our business;

~~Exploration. The~~• ~~search~~the ~~for~~effect ~~natural~~of ~~accumulations~~the ofbankruptcy ~~oil~~filing on our business and ~~natural~~the ~~gas~~interest byof ~~any~~various ~~geological~~creditors, ~~geophysical~~equity orholders and other ~~suitable means.~~ constituents;

~~Exploratory~~• ~~well. A~~domestic ~~well~~and ~~drilled~~worldwide toeconomic ~~find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir.~~ conditions;

~~Farm-out~~• orpotential ~~Farm-in. An~~adverse ~~agreement~~changes ~~where the owner of a working interest~~ in angeneral ~~oil~~economic ~~and~~conditions, ~~gas~~including ~~lease~~performance ~~assigns~~of ~~the~~financial ~~working~~markets, interest orrates ~~a portion~~and ~~thereof~~unemployment ~~to another party who desires to drill on the leased acreage. Generally, the assignee is required to drill one or more wells in order to earn its~~ rates;

5• unsuccessful drilling or operating activities;

~~Table~~3 ~~of Contents~~

interest inTable theof acreage. The assignor usually retains a royalty or reversionary interest in the lease. The interest received by an assignee is a farm-in while the interest transferred by the assignor is a farm-out. Contents

Field. AnIndex area consisting of either a single reservoir or to multipleFinancial reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. Statements

~~Fracturing. The~~• ~~technique of improving a well's production or injection rates by pumping a mixture of fluids into~~ the ~~formation~~inability ~~and rupturing the rock, creating an artificial channel. As part of this technique, sand or other material may also be injected into the formation~~ to ~~keep~~develop ~~the~~our ~~channel~~reserves ~~open, so that fluids or gases may more easily flow~~ through ~~the~~exploration ~~formation.~~and development activities;

~~Gross~~• ~~Acres. The~~the ~~total~~potential ~~acres~~impact of environmental and other governmental regulation, including delays in ~~which~~obtaining wegovernmental ~~own~~and ~~any~~other ~~amount~~permits ofand ~~working~~approvals, ~~interest.~~and impacts on competing energy sources as well as on natural gas;

~~Gross~~• ~~Wells. The~~possible ~~total~~legislative ~~number~~or ofregulatory ~~producing~~changes, ~~wells~~including severance or production tax regimes, hydraulic-fracturing regulation, additional drilling and permitting regulations, oil and natural gas derivatives reform, changes in ~~which~~state, wefederal ~~own~~and ~~any~~foreign ~~amount~~income oftaxes, ~~working~~environmental ~~interest.~~regulation (including with respect to climate change and greenhouse gas emissions), environmental risks and liability under federal, state, foreign and local environmental and other laws and regulations;

~~Horizontal~~• ~~Drilling. A drilling operation in which a portion of~~ the ~~well~~failure isto ~~drilled~~obtain ~~horizontally~~sufficient orcapital ~~laterally~~resources ~~within~~to afund ~~productive~~our ~~or potentially productive formation.~~ operations;

~~Identified~~• ~~drilling~~our ~~locations. Total~~ability ~~gross~~to ~~locations~~service ~~specifically identified~~ and ~~scheduled~~repay ~~by management as an estimation of~~ our ~~multi-year~~ drilling activities on existing acreage. Our actual drilling activities may change depending on the availability of capital, regulatory approvals, seasonal restrictions, natural gas and oil prices, costs, drilling results and other factors. debt;

~~Injection~~• ~~Well~~the orextent ~~Injector. A~~to ~~well~~ which isnatural ~~used~~gas tomarkets ~~place~~in ~~water,~~the ~~liquids~~United orStates ~~gases~~become ~~into~~integrated anwith ~~underground~~global ~~zone~~natural togas ~~assist~~markets inthrough ~~maintaining reservoir pressure,~~the ~~enhancing~~approval ~~recoveries~~and ~~from~~development ~~the~~of ~~field,~~infrastructure orsupporting ~~disposal~~the export of ~~produced~~liquefied ~~water.~~and other natural gas;

~~Intangible~~• ~~Drilling~~a ~~and~~decline ~~Development~~in ~~Costs. Expenditures made for wages, fuel, repairs, hauling and supplies necessary for the drilling or recompletion of an~~ oil or ~~gas~~natural ~~well and the preparation of such well for the production of oil or~~ gas, ~~but without any salvage value, which expenditures are generally accepted in the oil and gas industry as being currently deductible for federal income tax purposes. Examples of such costs include:~~production;

~~Lease. An~~• ~~instrument~~changes ~~which~~in ~~grants to another (~~the ~~lessee)~~localized ~~the~~and ~~exclusive~~global ~~right~~supply ~~to enter~~ and ~~explore~~demand ~~for,~~fundamentals ~~drill~~of ~~for, produce, store and remove oil and~~ natural gas ~~from the mineral interest, in consideration for which the lessor is entitled to certain rents~~ and ~~royalties~~oil ~~payable under the terms of the lease. Typically, the duration of the lessee's authorization is for a stated term of years~~ and ~~"for~~transportation ~~so long thereafter" as minerals are producing.~~ availability;

~~MBbl. One~~• ~~thousand~~incorrect ~~barrels~~estimates of ~~oil~~reserve orquantities, ~~other~~operating ~~liquid~~costs ~~hydrocarbons.~~and capital expenditures;

~~Mcf. One~~• ~~thousand~~increases ~~cubic~~in ~~feet~~the cost of ~~natural~~drilling, completion and gas atgathering ~~standard~~or ~~atmospheric~~other ~~conditions.~~costs of production and operations;

~~Mcf/d. One~~• ~~Mcf~~hazardous ~~per~~and ~~day.~~risky drilling operations; and

6• an inability to grow.

~~Table~~You should also consider carefully the statements under other sections of ~~Contents~~this annual report on Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements.

~~Mcfe. One~~All ~~thousand~~forward-looking ~~cubic~~statements ~~feet~~speak ~~equivalent~~only as of ~~natural~~the ~~gas,~~date ~~calculated~~of bythis ~~converting~~annual ~~oil~~report on Form 10-K. We do not intend to ~~equivalent~~publicly ~~Mcf~~update ator revise any forward-looking statements as a ~~ratio~~result of 6new ~~Mcf~~information, tofuture 1events ~~Bbl~~or ofotherwise, except as required by law. These cautionary statements qualify all forward-looking statements attributable to us or ~~oil~~persons acting on our behalf.

~~MMBbl. One~~4 ~~million barrels of oil or other liquid hydrocarbons.~~

MMBoe. OneTable million barrels of oil equivalent. Contents

MMBtu. OneIndex millionto BritishFinancial thermal units. Statements

~~MMcf. One~~Glossary ~~million cubic feet~~ of ~~natural~~Abbreviations ~~gas~~and atTerms ~~standard atmospheric conditions.~~

~~MMcf/d. One~~The ~~MMcf~~following ~~per~~are ~~day.~~abbreviations and definitions of certain terms commonly used in the oil and gas industry and this annual report on Form 10-K:

~~MMcfe~~Bbl. One ~~million~~stock ~~cubic~~tank ~~feet~~barrel, ~~equivalent~~or of42 ~~natural~~U.S. ~~gas,~~gallons ~~calculated~~liquid byvolume, ~~converting~~used ~~oil~~in reference to ~~equivalent~~oil ~~Mcf~~or atother aliquid ~~ratio of 6 Mcf to 1 Bbl of oil~~hydrocarbons.

~~MMcfe~~Bbl/d. One ~~MMcfe~~Bbl per day.

~~Net acres~~Bcf. ~~Gross~~ ~~acres~~One ~~multiplied~~billion bycubic ~~the~~feet ~~percentage~~of ~~working~~natural ~~interest~~gas ~~owned~~at bystandard ~~Warren~~atmospheric conditions.

~~Net production~~Bcfe. ~~Production~~ ~~that~~One isbillion ~~owned~~cubic feet equivalent of natural gas, calculated by ~~Warren~~converting ~~less~~oil ~~royalties~~to ~~and~~equivalent ~~production~~Mcf ~~due~~at ~~others~~a ratio of 6 Mcf to 1 Bbl of oil.

~~Net~~Boe. ~~Revenue~~Barrels ~~Interest. An~~of ~~owner's~~oil ~~interest~~equivalent, inwith ~~the~~six ~~revenues~~thousand ofcubic afeet ~~well~~of ~~after~~natural ~~deducting~~gas ~~proceeds~~being ~~allocated~~equivalent to ~~royalty~~one ~~and~~barrel ~~overriding interests~~of oil.

~~Net~~Btu ~~wells. The~~or ~~sum~~British ofthermal ~~all of Warren's full and partial well ownership interests (i~~unit.~~e., if~~ weThe ~~own~~quantity ~~25% percent~~ of ~~100%~~heat ~~working~~required ~~interest~~to inraise ~~eight producing wells,~~ the ~~total~~temperature ~~net~~of ~~producing~~one ~~well~~pound ~~count~~of ~~would~~water beby ~~two~~one ~~net~~degree ~~producing wells)~~Fahrenheit.

~~Number~~Coalbed ofmethane ~~Wells Drilled~~(CBM). ~~Refers~~ toNatural ~~the~~gas ~~number~~formed ofas ~~wells~~a ~~completed~~byproduct atof ~~any~~the ~~time~~coal ~~during~~formation ~~the~~process, ~~fiscal~~which ~~year,~~is ~~regardless~~trapped ofin ~~when~~coal ~~drilling~~seams ~~was~~and ~~initiatied~~produced by non-traditional means.

~~NYMEX~~Completion. ~~New~~ ~~York~~The ~~Mercantile~~installation ~~Exchange~~of permanent equipment for the production of oil or natural gas, or, in the case of a dry well, to reporting to the appropriate authority that the well has been abandoned.

~~Oil~~Condensate. ~~Crude~~ ~~oil,~~Liquid ~~condensate~~hydrocarbons ~~and~~associated with the production of a primarily natural gas ~~liquids~~reserve.

~~Operator~~Developed Acreage. The ~~individual~~number orof ~~company~~acres ~~responsible~~which ~~for~~are ~~the~~allocated ~~exploration,~~or ~~exploitation~~assignable ~~and~~to ~~production~~producing ofwells ~~an oil~~ or ~~natural~~wells ~~gas~~capable ~~well~~of ~~or lease~~production.

~~Permeability~~Development well. A ~~measure~~well ofdrilled ~~the~~into ~~resistance~~a orproved ~~capacity~~natural ofgas aor ~~geologic~~oil ~~formation~~reservoir to ~~allow~~the ~~water,~~depth ~~natural~~of ~~gas~~a orstratigraphic ~~oil~~horizon known to ~~pass through it.~~be productive.

~~PDP~~Dewatering. ~~Proved~~ ~~developed~~A ~~producing~~coalbed methane well typically begins dewatering with almost all water production and little, or no, natural gas production. The continuous production of water from a well that is dewatering reduces the water reservoir pressure on the coals. The reduced reservoir pressure enables the release of the gas within the coal to the wellbore. This results in an increase in the amount of gas production relative to the amount of water production. Dewatering ceases when peak gas production is reached.

~~PDNP~~Dry hole or well. ~~Proved~~ ~~developed~~An ~~nonproducing~~exploratory, development, or extension well that proves to be incapable of producing either oil or gas in sufficient quantities to justify completion as an oil or gas well.

~~Plugging~~Environmental ~~and~~assessment ~~abandonment~~(EA). ~~Refers~~ toA ~~the~~public ~~sealing~~document ~~off~~that ofanalyzes a ~~fluids~~proposed infederal ~~the~~action ~~strata~~for ~~penetrated~~the bypossibility aof ~~well~~significant soenvironmental ~~that the~~impacts. ~~fluids~~The ~~from~~analysis ~~one~~is ~~stratum~~required ~~will~~by ~~not~~the ~~escape~~National ~~into~~Environmental ~~another~~Policy orAct. toIf the ~~surface.~~environmental ~~Regulations~~impacts ofwill ~~all~~be ~~states~~significant, ~~require~~the ~~plugging~~federal ofagency ~~abandoned~~must ~~wells~~then prepare an environmental impact statement.

~~Productive~~Environmental ~~Well. An~~impact ~~exploratory,~~statement ~~development, or extension well that is not a dry well~~(EIS). A ~~well~~detailed ~~that~~statement isof ~~found~~the toenvironmental beeffects ~~capable~~ of ~~producing~~a ~~hydrocarbons in~~proposed ~~sufficient~~action ~~quantities~~and ~~such~~of ~~that~~alternative ~~proceeds~~actions ~~from~~that ~~the~~is ~~sale~~required offor ~~production~~all ~~exceed~~major ~~operating~~federal ~~and production expenses and taxes~~actions.

~~Proved developed non-producing reserves~~Exploitation. ~~Proved~~ ~~developed~~The ~~reserves~~continuing development ~~that~~of doa ~~not~~known ~~qualify~~producing asformation ~~proved~~in ~~developed~~a ~~producing~~previously ~~reserves, including~~discovered ~~reserves that~~field. ~~are~~To ~~expected~~make tocomplete beor ~~recovered~~maximize ~~from~~the ~~(i) completion~~ultimate ~~intervals~~recovery ~~that~~of ~~are~~oil ~~open~~or atnatural ~~the~~gas ~~time~~from of the ~~estimate,~~field ~~but~~by ~~have~~work ~~not~~including ~~started~~development ~~producing~~wells, ~~(ii) wells~~secondary ~~that~~recovery ~~are~~equipment ~~shut~~or inother ~~because pipeline~~suitable ~~connections~~processes ~~are~~and ~~unavailable or (iii) wells not capable of production for mechanical reasons~~technology.

7Exploration. The search for natural accumulations of oil and natural gas by any geological, geophysical or other suitable means.

~~Table~~Exploratory well. A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of ~~Contents~~oil or gas in another reservoir.

~~Proved~~5 ~~developed producing reserves. Reserves that are being recovered through existing wells with existing equipment and operating methods.~~

ProvedTable developed reserves. This term means "proved developed oil and gas reserves" as defined in Rule 4-10 of SEC Regulation S-X, and refers to reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Contents

ProvedIndex reserves or proved oil and gas reserves. This term means "proved oil and gas reserves" as defined in Rule 4-10 of SEC Regulation S-X and refers to theFinancial quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. Statements

~~Prospect~~Farm-out or Farm-in. A ~~specific~~An ~~geographic~~agreement ~~area~~where ~~which,~~the ~~based~~owner onof ~~supporting~~a ~~geological,~~working ~~geophysical~~interest orin ~~other~~an ~~data~~oil and ~~also~~gas ~~preliminary~~lease ~~economic analysis~~assigns ~~using reasonably~~the ~~anticipated~~working ~~prices~~interest ~~and~~or ~~costs~~a portion thereof to another party who desires to drill on the leased acreage. Generally, the assignee is ~~deemed~~required to ~~have~~drill ~~potential~~one ~~for~~or more wells in order to earn its interest in the ~~discovery~~acreage. ofThe ~~commercial~~assignor ~~hydrocarbons~~usually retains a royalty or reversionary interest in the lease. The interest received by an assignee is a farm-in while the interest transferred by the assignor is a farm-out.

~~PUD~~Field. ~~Proved~~ ~~undeveloped~~An area consisting of either a single reservoir or to multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

~~Proved~~Fracturing. ~~undeveloped~~The ~~reserves~~technique of improving a well’s production or injection rates by pumping a mixture of fluids into the formation and rupturing the rock, creating an artificial channel. ~~Proved~~ ~~reserves~~As ~~that~~part ~~are~~of ~~expected~~this totechnique, sand or other material may also be ~~recovered~~injected ~~from~~into ~~new~~the ~~wells~~formation onto ~~undrilled~~keep ~~acreage~~the orchannel ~~from~~open, ~~existing~~so that ~~wells~~fluids ~~where~~or ~~a relatively~~gases ~~major~~may ~~expenditure~~more iseasily ~~required~~flow ~~for~~through ~~recompletion~~the formation.

~~PV-10~~Gross ~~Value~~Acres. The ~~PV-10~~total ofacres ~~reserves~~in iswhich ~~the~~we ~~present~~own ~~value~~any ofamount ~~estimated future revenues to be generated from the production~~ of ~~the~~working reserves net of estimated production and future development costs and future plugging and abandonment costs, using the twelve-month arithmetic average of the first of the month prices without giving effect to hedging activities or future escalation, costs as of the date of estimate without future escalation, without non- property related expenses such as general and administrative expenses, debt service and depreciation, depletion, amortization and impairment and income taxes, and discounted using an annual discount rate of 10%interest. ~~See Footnote (1) to the table under oil and natural gas reserves-proved reserves in items 1 and 2.~~

~~Re-entry~~Gross Wells. ~~Entering~~ anThe ~~existing~~total ~~well~~number ~~bore~~of toproducing ~~redrill~~wells orin ~~repair~~which we own any amount of working interest.

~~Recompletion~~Horizontal Drilling. ~~The~~ ~~process~~A ofdrilling ~~re-entering~~operation anin ~~existing~~which ~~wellbore~~a ~~that~~portion isof ~~either~~the ~~producing~~well oris ~~not~~drilled ~~producing~~horizontally ~~and~~or ~~completing~~laterally ~~new~~within ~~reservoirs~~a ~~in an~~productive ~~attempt~~or topotentially ~~establish~~productive ~~or increase existing production~~formation.

~~Reserves. This~~Identified ~~term~~drilling islocations. ~~defined~~Total ingross ~~Rule 4-10~~locations ofspecifically ~~SEC~~identified ~~Regulation S-X~~ and ~~refers~~scheduled ~~to estimated remaining quantities of oil and gas~~by ~~and related~~management ~~substances~~as ~~anticipated~~an toestimation ~~be economically producible, as~~ of aour ~~given~~multi-year ~~date,~~drilling byactivities ~~application~~on ofexisting ~~development projects to known accumulations~~acreage. InOur ~~addition,~~actual ~~there~~drilling ~~must~~activities ~~exist,~~may orchange ~~there~~depending ~~must~~on bethe ~~a reasonable~~availability ~~expectation~~of ~~that~~capital, ~~there~~regulatory ~~will exist~~approvals, ~~the~~seasonal ~~legal right to produce or a revenue interest in the production~~restrictions, ~~installed~~natural ~~means~~gas ofand ~~delivering~~ oil ~~and gas or related substances to market~~prices, costs, ~~and~~drilling ~~all permits~~results and ~~financing~~other ~~required to implement the project~~factors.

~~Reservoir~~Injection Well or Injector. A ~~porous~~well ~~and~~which ~~permeable~~is ~~underground~~used ~~formation~~to ~~containing~~place awater, ~~natural~~liquids ~~accumulation~~or ofgases ~~producible~~into an ~~natural~~underground ~~gas~~zone ~~and/or~~to ~~oil~~assist ~~that~~in ~~is confined~~maintaining ~~by impermeable~~reservoir ~~rock~~pressure, orenhancing ~~water~~recoveries ~~barriers~~from ~~and~~the isfield, ~~separate~~or ~~from~~disposal ~~other~~of ~~reservoirs~~produced water.

~~Royalty. An~~Intangible ~~interest~~Drilling ~~in an oil~~ and ~~natural~~Development ~~gas~~Costs. ~~lease~~Expenditures ~~that~~made ~~gives~~for ~~the~~wages, ~~owner~~fuel, ofrepairs, ~~the~~hauling ~~interest~~and ~~the~~supplies ~~right~~necessary tofor ~~receive a portion of~~ the ~~production~~ ~~from the~~drilling ~~leased acreage,~~ or ofrecompletion ~~the proceeds~~ of ~~the~~an ~~sale~~oil ~~thereof,~~or ~~but~~gas ~~generally~~well ~~does~~and ~~not require~~ the ~~owner~~preparation toof ~~pay~~such ~~any~~well ~~portion~~for of the ~~costs~~production of ~~drilling~~oil or ~~operating~~gas, ~~the~~but ~~wells~~without onany ~~the~~salvage ~~leased acreage. Royalties may be either landowner's royalties~~value, which expenditures are ~~reserved~~generally byaccepted ~~the~~in ~~owner of~~ the ~~leased~~oil ~~acreage~~and atgas ~~the~~industry ~~time~~as ~~the~~being ~~lease~~currently isdeductible ~~granted,~~for orfederal income ~~overriding~~tax ~~royalties,~~purposes. ~~which~~Examples ~~are usually reserved by an owner~~ of ~~the leasehold~~such incosts ~~connection~~include: ~~with a transfer to a subsequent owner.~~

8• ground clearing, drainage construction, location work, road building, temporary roads and ponds, surveying and geological work;

~~Table~~• drilling, completion, logging, cementing, acidizing, perforating and fracturing of ~~Contents~~wells;

~~Secondary~~• ~~Recovery. An~~hauling ~~artificial~~mud ~~method or process used to restore or increase production from a reservoir after the primary production by the natural producing mechanism~~ and ~~reservoir~~water, ~~pressure~~perforating, ~~has~~swabbing, ~~experienced~~supervision ~~partial depletion. Gas injection~~ and ~~water flooding are examples of this technique.~~ overhead;

~~Shut~~• ~~in. A~~renting ~~well~~horizontal ~~suspended~~tools, ~~from~~milling ~~production~~tools orand ~~injection~~bits; ~~but not abandoned.~~ and

~~Spacing. The~~• ~~number~~construction of ~~wells~~derricks, ~~which~~pipelines ~~can~~and beother ~~drilled~~physical onstructures anecessary ~~given~~for ~~area~~the ofdrilling ~~land~~or ~~under~~preparation ~~applicable~~of ~~laws~~the ~~and regulations~~wells.

~~Standardized~~Lease. ~~Measure~~An ofinstrument ~~Discounted~~which ~~Future~~grants ~~Net~~to ~~Cash~~another ~~Flows. The~~(the ~~discounted~~lessee) ~~future~~the ~~net~~exclusive ~~cash~~right ~~flows~~to ~~relating~~enter toand ~~proved~~explore ~~reserves~~for, ~~based~~drill ~~on prices~~for, ~~used~~produce, instore and ~~estimating~~remove oil and natural gas from the ~~reserves~~mineral interest, ~~year-end~~in ~~costs,~~consideration ~~and~~for ~~statutory~~which ~~tax~~the ~~rates,~~lessor ~~and~~is aentitled ~~ten~~to ~~percent~~certain ~~annual~~rents ~~discount~~and ~~rate.~~royalties ~~The~~payable ~~information~~under ~~for~~the ~~this~~terms ~~calculation~~of isthe ~~included~~lease. inTypically, the ~~note~~duration ~~regarding~~of ~~disclosures~~the ~~about~~lessee’s ~~oil and~~authorization ~~gas~~is ~~producing~~for ~~activities~~a ~~contained~~stated term inof ~~the~~years ~~Notes~~and to“for ~~Consolidated~~so ~~Financial~~long ~~Statements~~thereafter” ~~included~~as inminerals ~~this~~are ~~Form 10-K~~producing.

~~Tangible Drilling Costs~~MBbl. ~~Expenditures~~ ~~necessary~~One tothousand ~~develop~~barrels of oil or ~~gas~~other ~~wells, including acquisition, transportation and storage costs,~~liquid ~~which typically are capitalized and depreciated for federal income tax purposes~~hydrocarbons. ~~Examples of such expenditures include:~~

~~Undeveloped acreage~~Mcf. ~~Lease~~ ~~acreage~~One onthousand ~~which~~cubic ~~wells~~feet ~~have been not drilled or completed to a point that would permit the production~~ of ~~commercial quantities~~ of natural gas ~~and~~at ~~oil~~standard ~~regardless~~atmospheric ~~of whether such acreage contains proved reserves~~conditions.

~~Ultimate recovery~~Mcf/d. ~~The~~ ~~total~~One ~~expected~~Mcf ~~recovery~~per ~~of oil and gas from a producing well, leasehold, pool or field~~day.

~~Waterflood~~Mcfe. A ~~secondary~~One ~~recovery~~thousand ~~operation~~cubic infeet ~~which~~equivalent ~~water~~of isnatural ~~injected~~gas, ~~into~~calculated ~~the~~by ~~producing~~converting ~~formation~~oil into ~~order~~equivalent toMcf ~~maintain~~at ~~reservoir pressure~~a ~~and~~ratio ~~force oil~~of ~~toward~~6 ~~and~~Mcf ~~into~~to ~~the~~1 ~~producing~~Bbl ~~wells~~of oil.

~~Working Interest~~MMBbl. An ~~interest~~One inmillion anbarrels ~~oil and natural gas lease that gives the owner~~ of ~~the interest the right to drill for and produce~~ oil ~~and~~or ~~natural gas~~other onliquid ~~the leased acreage and requires the owner to pay a share of the costs of drilling and production operations~~hydrocarbons.

~~Workover~~MMBoe. ~~Remedial~~ ~~operations~~One onmillion abarrels ~~well conducted with the intention~~ of ~~restoring~~oil ~~or increasing production from the same zone, including by plugging back, squeeze cementing, reperforating, cleanout and acidizing~~equivalent.

6 ~~Items 1 and 2: Business and Properties~~

Overview Table of Contents

WeIndex areto anFinancial independent energy company engaged in the exploration, development and production of domestic onshore crude oil and natural gas reserves. We focus our efforts primarily on the development of our waterflood oil recovery properties in the Wilmington field within the Los Angeles Statements

9MMBtu. One million British thermal units.

~~Table~~MMcf. One million cubic feet of ~~Contents~~natural gas at standard atmospheric conditions.

~~Basin of~~MMcf/d. ~~California,~~One ~~our~~MMcf ~~position~~per ~~in the Marcellus Shale gas in northeastern Pennsylvania and our coalbed methane, or CBM, natural gas properties located in Wyoming~~day.

~~As of~~MMcfe. ~~December 31,~~One ~~2015,~~million wecubic ~~owned~~feet ~~natural~~equivalent ~~gas and oil leasehold interests in approximately 106,335 gross (80,546 net) acres, approximately 66%~~ of ~~which~~natural ~~are undeveloped. Substantially all our undeveloped acreage is located in Wyoming. We have identified approximately 140 gross drilling locations in our Wilmington field units. Additionally~~gas, wecalculated ~~have~~by ~~identified approximately~~converting ~~140~~oil ~~gross~~to ~~drilling~~equivalent ~~locations~~Mcf onat ~~our~~a ~~acreage~~ratio inof ~~Wyoming,~~6 ~~primarily~~Mcf ~~based~~to on1 ~~80-acre~~Bbl ~~well spacing, and 74 gross drilling locations in the Marcellus Shale~~of oil.

~~As of December 31, 2015, we had estimated net proved reserves of 40~~MMcfe/d.2 ~~MMBoe,~~One ~~with~~MMcfe aper ~~PV-10 Value of $96 million, based on a reserve report prepared by Netherland, Sewell & Associates, Inc~~day. These estimated net proved reserves include 13 MMBbls in our Wilmington units (32%), 95 Bcfe in our Marcellus field in Pennsylvania (39%) and 66 Bcfe primarily in our CBM program in the Washakie Basin (27%) in Wyoming. These estimated net proved reserves are located on approximately 34% of our total net acreage.

~~As of~~Net ~~December 31, 2015, we had interests in 570 gross (411~~acres.3 ~~net)~~Gross ~~producing~~acres ~~wells~~multiplied ~~and~~by ~~are~~ the ~~operator~~percentage ~~for~~working ~~94%~~interest ofowned ~~these~~by ~~wells~~Warren. ~~For the fourth quarter of December 2015, our average daily production was 2,300 barrels of oil equivalent per day ("MBoe/d") gross (14.3 MBoe/d net).~~

~~As of~~Net ~~December 31,~~production. ~~2015,~~Production ~~our~~that ~~common stock~~ is ~~traded~~owned onby ~~the~~Warren ~~NASDAQ~~less ~~Global~~royalties Market ("NASDAQ") under the trading symbol "WRES." The Company has received notice from NASDAQ of potential delisting. For more information on the potential delisting of our common stock see "Item 1A: Risk Factors—Risks Relating to Ownership of Our Common Stock." The Company was incorporated on June 12, 1990 as a Delaware corporation for the purpose of acquiring and ~~developing~~production ~~oil &~~due ~~gas properties~~others. ~~In 2004, the Company was reincorporated as a Maryland corporation.~~

Net Revenue Interest. An owner’s interest in the revenues of a well after deducting proceeds allocated to royalty and overriding ~~Business~~interests. ~~Strategy~~

~~The~~Net ~~principal~~wells. ~~elements~~The sum of ~~our~~all ~~business~~of ~~strategy~~Warren’s ~~are~~full ~~designed to maintain~~ and ~~grow~~partial ~~our~~well ~~oil~~ownership ~~and~~interests ~~gas reserves~~(i.e., if ~~production~~we ~~volumes~~own ~~and~~25% ~~cash~~percent ~~flows~~of at100% aworking ~~positive~~interest ~~return~~in oneight ~~invested~~producing ~~capital.~~wells, Wethe ~~intend~~total tonet ~~accomplish~~producing ~~this~~well bycount ~~focusing~~would onbe ~~the~~two ~~following~~net ~~key~~producing ~~strategies:~~wells).

10Number of Wells Drilled. Refers to the number of wells completed at any time during the fiscal year, regardless of when drilling was initiatied.

NYMEX. New ~~Table~~York ofMercantile ~~Contents~~Exchange.

~~Business~~Oil. ~~Strengths~~ Crude oil, condensate and natural gas liquids.

~~Balanced Asset Portfolio~~Operator. ~~Since~~ ~~1999,~~The weindividual ~~have~~or ~~grown~~company ~~our~~responsible ~~asset~~for ~~base and diversified our production through California oil property acquisitions in~~ the ~~Los~~ ~~Angeles Basin and natural gas property acquisitions in the Atlantic Rim Prospect~~exploration, ~~Washakie~~exploitation ~~Basin in southwestern Wyoming~~ and ~~the~~production ~~Marcellus~~of ~~Shale~~an ~~play~~oil inor ~~eastern Pennsylvania. We believe our diverse asset base provides us with the flexibility to reallocate capital among our assets depending on fluctuations in~~ natural gas ~~and oil prices, as~~ well ~~as area economics~~or lease.

~~Long-Lived~~Permeability. ~~Proved~~A ~~Reserves~~measure ~~with~~of ~~Stable~~the ~~Production~~resistance ~~Characteristics. Our~~or ~~properties~~capacity ~~generally~~of ~~have~~a ~~long~~geologic ~~reserve~~formation ~~lives~~to ~~and reasonably~~allow ~~stable and predictable well production characteristics~~water, ~~with~~natural agas ~~ratio~~or ofoil ~~total estimated proved reserves~~ to ~~production~~pass through ~~of approximately 16 years~~it.

~~Low-Risk Multi-Year Drilling Inventory in Established Resource Plays~~PDP. ~~Most~~ ofProved ~~our~~developed ~~drilling locations are located in proven resource plays that possess low geologic risk and lead to predictable drilling results~~producing. We have identified approximately 140 gross drilling locations in our California assets that have an average vertical depth of less than 4,000 feet and are located in areas where we are an established driller and producer and 74 gross drilling locations in the Marcellus Shale.

~~Operational control and financial flexibility~~PDNP. As ofProved ~~December 31,~~developed ~~2015, we were the operator of record for 94% of our producing wells~~nonproducing. We generally prefer to retain operating control over our properties, which allows us to more effectively control operating costs, timing of development activities and technological enhancements, marketing of production, and allocation of our capital budget. In addition, the timing of most of our capital expenditures is discretionary, which allows us a significant degree of flexibility to adjust the size of our capital budget. In response to a decline in commodity prices and current market conditions, we have reduced our expected capital expenditure budget for

11Plugging and abandonment. Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another or to the surface. Regulations of all states require plugging of abandoned wells.

~~Table~~Productive Well. An exploratory, development, or extension well that is not a dry well. A well that is found to be capable of ~~Contents~~producing hydrocarbons in sufficient quantities such that proceeds from the sale of production exceed operating and production expenses and taxes.

~~2016~~Proved developed non-producing reserves. Proved developed reserves that do not toqualify anas ~~estimated~~proved ~~$3 million~~developed producing reserves, ~~compared~~including reserves that are expected to ~~$19~~be recovered from (i) ~~million~~completion ofintervals ~~actual~~that ~~capital~~are ~~expenditures~~open inat ~~2015.~~the ~~Because~~time of the ~~decline~~estimate, inbut ~~oil~~have ~~and~~not ~~gas~~started ~~prices~~producing, we(ii) wells ~~have~~that ~~chosen~~are toshut ~~finance~~in because ~~our~~pipeline ~~2016~~connections ~~capital expenditure~~are ~~budget~~unavailable ~~primarily~~or ~~through~~(iii) wells ~~our~~not ~~internally~~capable ~~generated~~of ~~operating~~production ~~cash~~for ~~flows~~mechanical reasons.

~~Experienced~~Proved ~~management~~developed producing ~~and operational teams~~reserves. ~~Our~~ ~~core~~Reserves ~~team~~that ofare ~~technical~~being ~~staff~~recovered ~~and~~through ~~operating~~existing ~~managers~~wells ~~have~~with ~~broad~~existing ~~industry experience,~~equipment ~~including experience in horizontal~~ and directional drilling, waterflood recovery operations, Marcellus development and CBM development and completion. Each of our operational teams in our Pennsylvania, California and Wyoming projects has extensive operating ~~experience in their respective geographic areas~~methods. ~~We continue to utilize technologies and waterflood recovery practices that will allow us to optimize production and improve the ultimate recoveries of crude oil on our California properties.~~

Proved ~~Areas~~developed reserves. This term means “proved developed oil and gas reserves” as defined in Rule 4-10 of ~~Development~~SEC ~~Activities~~ Regulation S-X, and refers to reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

~~Our~~Proved ~~development~~reserves ~~activities~~or ~~are focused primarily on waterflood~~ proved oil ~~recovery~~and ~~projects~~gas inreserves. ~~the~~This ~~Wilmington~~term ~~field~~means in“proved ~~California,~~oil ~~CBM projects in Wyoming~~ and ~~our~~gas ~~Marcellus~~reserves” ~~Shale~~as ~~project~~defined ~~that~~in ~~utilizes~~Rule 4-10 ~~horizontal~~of ~~drilling~~SEC Regulation S-X and ~~hydraulic~~refers ~~fracturing techniques~~ to ~~develop~~the ~~dry~~quantities ~~natural~~of oil and gas., ~~The~~which, ~~table~~by ~~below~~analysis ~~highlights our main areas~~ of ~~activity~~ asgeoscience ofand ~~December 31~~engineering data, ~~2015:~~can be

Area
Atlantic Rim Project, Wyoming	90,777	70,544	47,705
Wilmington Field, California	2,476	2,460	1,084
Marcellus, Pennsylvania	6,513	5,288	2,608
Pacific Rim Project, Wyoming	197	87	87
Other(1)	6,372	2,167	1,477

Total	106,335	80,546	52,961

Table (1)Includes conventionalof oil and gas properties located primarily in New Mexico, Colorado, North Dakota and Texas. Contents

CaliforniaIndex Projects to Financial Statements

estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government ~~Wilmington~~regulations—prior ~~Townlot~~to ~~Unit~~ the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.

~~Our~~Prospect. ~~Wilmington~~A ~~Townlot~~specific ~~Unit~~geographic ~~("WTU")~~area ~~is located in the Wilmington field within the Los Angeles Basin of California. The WTU~~which, abased ~~unitized oil~~on ~~field~~supporting ~~consisting of 1~~geological,~~440~~ ~~gross~~geophysical ~~(1,424~~or ~~net)~~other ~~acres,~~data ~~has~~and ~~produced~~also ~~more~~preliminary ~~than~~economic analysis ~~150 million~~using ~~barrels~~reasonably ofanticipated ~~oil~~prices ~~from primary~~ and ~~secondary~~costs, ~~production.~~is ~~All~~deemed ~~the~~to ~~working~~have ~~interests~~potential infor the ~~WTU~~discovery ~~are subject to the terms and provisions~~ of acommercial ~~unit operating agreement~~hydrocarbons. ~~We own an approximate 98.9% undivided working interest in the WTU.~~

During December 2015, we averaged 2,390 barrels of oil per day ("Bbls/d") gross, (1,937 Bbls/d net) production in the WTU, compared to 3,193 Bbls/d gross (2,588, Bbls/d net) production during December 2014PUD. AsProved ~~of December 31, 2015, there were 143 gross (141 net) producing wells~~undeveloped. In addition, estimated proved reserves as of December 31, 2015 were 11.0 MMBbls gross (9.0 MMBbls net), of which approximately 64% are PDP or PDNP and 36% are PUDs. We seek to develop our PUD reserves using directional and horizontal drilling and secondary recovery techniques, such as a waterflood recovery.

12Proved undeveloped reserves. Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

~~Table~~PV-10 Value. The PV-10 of ~~Contents~~reserves is the present value of estimated future revenues to be generated from the production of the reserves net of estimated production and future development costs and future plugging and abandonment costs, using the twelve-month arithmetic average of the first of the month prices without giving effect to hedging activities or future escalation, costs as of the date of estimate without future escalation, without non- property related expenses such as general and administrative expenses, debt service and depreciation, depletion, amortization and impairment and income taxes, and discounted using an annual discount rate of 10%. See Footnote (1) to the table under oil and natural gas reserves-proved reserves in Items 1 and 2.

~~North~~Re-entry. ~~Wilmington~~Entering ~~Unit~~ an existing well bore to redrill or repair.

Recompletion. The ~~North~~process ~~Wilmington Unit ("NWU"), a unitized oil field consisting~~ of ~~1,036~~re-entering ~~gross~~an ~~and acres, is located in the Wilmington oil field adjacent to our~~ existing ~~WTU.~~wellbore ~~All~~that ~~working~~is ~~interests~~either inproducing ~~the~~or ~~NWU~~not ~~are~~producing ~~subject to the terms~~ and ~~provisions~~completing ofnew areservoirs ~~unit~~in ~~operating agreement. We own a 100% working interest and~~ an ~~approximate~~attempt ~~84.7%~~to ~~net revenue~~establish ~~interest~~or inincrease ~~the NWU, including~~ existing ~~wells, certain equipment and certain surface properties~~production.

~~During December~~Reserves. ~~2015~~This weterm ~~averaged~~is ~~521~~defined ~~Bbls/d~~in ~~gross,~~Rule 4-10 ~~(442~~of ~~Bbls/d~~SEC Regulation S-X ~~net)~~and ~~production~~refers into ~~the~~estimated ~~NWU.~~remaining Asquantities of ~~December 31~~oil and gas and related substances anticipated to be economically producible, ~~2015~~as ~~there~~of ~~were~~a 42given ~~gross~~date, ~~and~~by ~~net~~application ~~producing~~of ~~wells~~development inprojects ~~the~~to known ~~NWU~~accumulations. In addition, ~~estimated~~there ~~proved~~must ~~reserves~~exist, asor ofthere ~~December 31~~must be a reasonable expectation that there will exist, ~~2015~~the ~~were~~legal ~~4.7~~right ~~MMBbls~~to ~~gross~~produce ~~(4.0~~or ~~MMBbls~~a ~~net)~~revenue interest in the production, installed means of ~~which~~delivering ~~27%~~oil ~~are~~and ~~PDPs~~gas or related substances to market, and ~~73%~~all ~~are~~permits ~~PUDs~~and financing required to implement the project.

Reservoir. A porous and permeable underground ~~Pennsylvania~~formation ~~Marcellus~~containing ~~Shale~~a ~~Project~~ natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.

~~Our~~Royalty. ~~Pennsylvania~~An ~~properties~~interest ~~consist~~in ofan aoil ~~concentrated,~~and ~~contiguous~~natural ~~acreage~~gas ~~position~~lease ~~located~~that ingives ~~Wyoming County, Pennsylvania in~~ the ~~northeast~~ ~~portion~~owner of the ~~Marcellus~~interest ~~Shale.~~the Weright ~~operate~~to ~~approximately~~receive ~~6,512~~a ~~gross~~portion ~~(5,289~~of ~~net)~~the production ~~acres~~from in the ~~Lower~~leased ~~Marcellus Shale and 6~~acreage,~~512~~ ~~gross~~or ~~(3,966~~of ~~net)~~the ~~acres~~proceeds inof the ~~Upper~~sale ~~Marcellus~~thereof, ~~Shale.~~but Wegenerally ~~hold~~does ~~an approximate~~not ~~75%~~require ~~working~~the ~~interest~~owner ~~and~~to anpay ~~approximate~~any ~~60%~~portion ~~net~~of ~~revenue~~the ~~interest~~costs inof ~~these~~drilling ~~Lower~~or ~~Marcellus~~operating ~~assets~~the ~~and~~wells anon ~~approximate~~the ~~56%~~leased ~~working~~acreage. ~~interest~~Royalties ~~and~~may ~~45%~~be ~~net~~either ~~revenue interest in these Upper~~landowner’s ~~Marcellus~~royalties, ~~assets~~which .are ~~The~~reserved ~~Marcellus~~by ~~assets had net average gas production for~~ the ~~three~~owner ~~months ended December 31, 2015~~ of ~~approximately 63.9 MMcfe/d. We have 30 gross (22.5 net) producing wells in~~ the ~~Lower~~leased ~~Marcellus~~acreage ~~and~~at ~~3 gross (1.7 net) producing wells in~~ the ~~Upper~~time ~~Marcellus. We have identified 24 additional drilling locations in~~ the ~~Lower~~lease ~~Marcellus~~is ~~and~~granted, 1or ~~additional~~overriding ~~drilling location in the Upper Marcellus~~royalties, which weare ~~may~~usually orreserved ~~may~~by ~~not~~an ~~choose~~owner toof ~~develop.~~the ~~Estimated~~leasehold ~~net~~in ~~proved~~connection ~~reserves~~with asa oftransfer ~~December 31,~~to ~~2015~~a ~~were~~subsequent 95owner.2 ~~Bcfe, of which 92% are PDP.~~

~~Atlantic~~Secondary ~~Rim~~Recovery. ~~Projects~~An inartificial method or process used to restore or increase production from a reservoir after the ~~Washakie~~primary production ~~Basin,~~by ~~Wyoming~~ the natural producing mechanism and reservoir pressure has experienced partial depletion. Gas injection and water flooding are examples of this technique.

~~The~~Shut ~~Washakie Basin is located~~ in ~~the southeast portion of the Greater Green River Basin in southwestern Wyoming and represents our largest acreage position~~. AsA of December 31, 2015, we owned 90,777 gross (70,544 net) acres for CBM development in this area, of which 47,705 net acres were undeveloped. This area contains approximately 140 gross identified potential drilling locations, primarily based on 80-acre well ~~spacing.~~suspended Asfrom ofproduction ~~December 31,~~or ~~2015,~~injection ~~the~~but ~~estimated~~not ~~gross recoverable proved reserves in this basin were 106~~abandoned.0 ~~Bcf gross (64.6 Bcf net) based on 80-acre well spacing.~~

~~In addition~~Spacing. toThe ~~this~~number ~~acreage,~~of wewells ~~have~~which ~~the~~can ~~rights~~be todrilled ~~drill~~on ~~and~~a ~~develop~~given ~~the deeper, conventional formations ("deep rights") in some, but not all, of the acreage in the Atlantic Rim~~ area. ~~We own approximately 60,217 gross (50,896 net) undeveloped acres~~ of ~~deep~~land ~~rights~~under ~~inside~~applicable ~~the~~laws ~~Spyglass Hill Unit,~~ and ~~approximately 12,745 gross (8,054 net) undeveloped acres of deep rights outside the Spyglass Hill Unit, for a total of 72,961 gross (58,949 net) undeveloped acres in the entire Atlantic Rim area~~regulations.

~~The net~~Standardized ~~average~~Measure ~~gas~~of ~~production~~Discounted ~~for~~Future ~~our~~Net ~~Wyoming~~Cash ~~assets~~Flows. ~~for~~The ~~the~~discounted ~~three~~future ~~months~~net ~~ended~~cash ~~December 31,~~flows ~~2015~~relating ~~was~~to ~~approximately~~proved ~~11.5~~reserves ~~MMcfe/d.~~based Weon prices ~~have~~used ~~316~~in ~~gross~~estimating ~~(199.1~~the ~~net)~~reserves, ~~producing~~year-end ~~wells~~costs, ~~in the~~and ~~Washakie~~statutory ~~Basin.~~tax Werates, ~~have~~and ~~identified~~a ~~140~~ten ~~additional~~percent ~~potential~~annual ~~drilling~~discount ~~locations~~rate. inThe ~~our~~information ~~assets~~for this calculation is included in the ~~Basin.~~note ~~Estimated~~regarding ~~net~~disclosures ~~proved~~about oil ~~reserves~~and asgas ofproducing ~~December 31,~~activities ~~2015~~contained ~~were~~in ~~242.2~~the ~~Bcfe,~~Notes ofto ~~which 60%~~Consolidated ~~and~~Financial ~~20%,~~Statements ~~respectively,~~included ~~are~~in ~~PDP~~this ~~and PDNP~~Form 10-K.

Tangible Drilling Costs. Expenditures necessary to develop oil or gas wells, including acquisition, transportation and storage costs, ~~Atlantic~~which ~~Rim~~typically ~~Project~~ are capitalized and depreciated for federal income tax purposes. Examples of such expenditures include:

~~Our~~• ~~Atlantic~~well Rim project comprises approximately 90,777 gross (70,544 net) acres on the eastern rim of the Washakie Basin. As of December 31, 2015, we had drilled a total of 316 wells on this average. Currently, we are developing our acreage in the Atlantic Rim project within the Spyglass Hill Unit. casings;

13• wellhead equipment;

~~Table~~8 ~~of Contents~~

SpyglassTable Hillof Unit Contents

WarrenIndex operatesto theFinancial U.S. Bureau of Land Management (the "BLM") approved Spyglass Hill Unit in the Atlantic Rim area, which covers approximately 113,290 total gross acres (the "Unit"). The Spyglass Hill Unit contains three Participating Areas in which all producing wells are situated, being the Grace Point, Sun Dog and Doty Mountain Participating Areas. Statements

~~Spyglass~~• ~~Hill~~water ~~Unit~~disposal facilities;

Participating Areas
"A"; Grace Point	6,362.13	6,082.13	5,157.11
"B"; Doty Mountain	11,494.67	10,334.67	9,118.40
"C"; Sun Dog	11,091.08	10,406.20	7,688.77

Total	28,947.88	26,823.00	21,964.28

•

metering equipment;

~~Warren also~~• owns interests in undeveloped leases in the southern portion of the Atlantic Rim Project, which are prospective for multiple deep formations. These leases are perpetuated by operations or production, and are subject to other Unit requirements. The BLM requires the drilling of 25 CBM wells per year under the Spyglass Hill Unit Agreement. In 2015, Warren drilled no CBM wells within the Unit. However, on September 2, 2015 the BLM granted Warren a deferral of the 25 well requirement for 2015, conditioned upon (i) the BLM's periodic approval of Warren's activities within an optimization program designed by Warren and (ii) Warren drilling 25 CBM wells by September 11, 2016. The optimization program is currently being conducted, and includes certain remedial operations and evaluations in connection with a hydrology study obtained by Warren. By the terms of the BLM conditional deferral, in the event the optimization program is discontinued or not approved by the BLM, or if Warren fails to drill 25 wells by September 11, 2016, the BLM may permanently contract (reduce) the Spyglass Hill Unit to the areas within the three (3) Participating Areas, described above. If such a Unit contraction event occurred, producing wells would not be affected and the leases removed from the Unit would be subject to various terms and BLM rules, including generally, a two (2) year guarantee after contraction. pumps;

~~Midstream~~• ~~Assets~~ gathering lines;

~~Warren~~• ~~owns~~storage atanks; ~~100% interest in the gas gathering, compression~~ and pipeline midstream assets which serve the Atlantic Rim Project. The midstream assets consist of gathering and compression equipment and a 59-mile pipeline that transports gas from the gathering systems throughout the Spyglass Hill Unit area to the Wyoming Interstate Company (WIC) interstate gas transportation pipeline.

~~Sun~~• ~~Dog~~gas ~~Participating~~compression ~~Area~~ and treatment facilities.

~~Currently,~~Undeveloped ~~the Sun Dog Participating Area contains 113 wells~~acreage. ~~During~~Lease ~~December~~acreage ~~2015,~~on ~~production from 113 producing~~ which wells ~~averaged approximately~~have ~~5,253~~been ~~gross~~not ~~Mcf/d~~drilled ofor ~~gas~~completed ~~and~~to ~~approximately 45,000 Bbls/d of water. Based on~~ a ~~report~~point ~~from~~that ~~Netherland,~~would ~~Sewell &~~permit ~~Associates, Inc.~~the asproduction of ~~December 31,~~commercial ~~2015,~~quantities ~~estimated proved~~of ~~reserves~~natural ~~for~~gas ~~the~~and ~~wells~~oil inregardless ~~the Sun Dog sub-area were 54.9 gross (31.3 net) Bcf. We currently own a working interest~~ of ~~approximately~~whether ~~69%~~such inacreage ~~the~~contains ~~wells~~proved ~~drilled in the Sun Dog Participating Area~~reserves.

~~Doty~~Ultimate ~~Mountain~~recovery. ~~Participating~~The ~~Area~~ total expected recovery of oil and gas from a producing well, leasehold, pool or field.

~~The~~Waterflood. ~~Doty~~A ~~Mountain~~secondary ~~Participating~~recovery ~~Area~~operation ~~currently~~in ~~contains~~which 81water ~~CBM~~is ~~wells~~injected oninto ~~80-acre~~the ~~spacing.~~producing ~~During~~formation ~~December~~in ~~2015,~~order ~~these~~to ~~wells~~maintain ~~were~~reservoir ~~producing~~pressure ~~approximately~~and ~~12,342~~force ~~gross~~oil ~~Mcf/d~~toward ofand ~~natural~~into ~~gas~~the producing wells.

14Working Interest. An interest in an oil and natural gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

~~Table~~Workover. Remedial operations on a well conducted with the intention of ~~Contents~~restoring or increasing production from the same zone, including by plugging back, squeeze cementing, reperforating, cleanout and acidizing.

~~and 32,000~~9 Bbls/d of water. Based on a report from Netherland, Sewell & Associates, Inc. as of December 31, 2015, estimated proved reserves for the wells in the Doty Mountain sub-area were 49.3 gross (32.0 net) Bcf. We currently own an approximate 79% working interest in the wells drilled in the Doty Mountain Participating Area.

GraceTable Pointof Participating Area Contents

TheIndex Graceto PointFinancial Participating Area contains 51 CBM wells on 80-acre spacing. During December 2015, these wells produced approximately 760 gross Mcf/d of natural gas and 21,000 Bbls/d of water. Based on a report from Netherland, Sewell & Associates, Inc. as of December 31, 2015, estimated proved reserves for the wells in the Grace Point Participating Area were 1.8 gross (1.3 net) Bcf. We own an approximate 81% working interest in the wells drilled in the Grace Point Participating Area. Statements

~~Catalina~~Items 1 ~~Unit~~ and 2: Business and Properties

~~The~~Overview Catalina Unit is operated by Escalera Resources, Inc., and consists of 71 CBM wells. During December 2015, gross production from the Catalina unit averaged approximately 9,165 gross Mcf/d of natural gas and approximately 65,000 Bbls/d of water. Warren currently owns a working interest of approximately 13.4% in the Catalina Unit. Warren's current working interest in the unit is 22.22%

Warren Resources, Inc. is an independent energy company engaged in the exploration, development and production of domestic onshore crude oil and gas reserves. We focus our efforts primarily on the development of our waterflood oil recovery properties in the Wilmington field ~~Deep~~within ~~Rights~~ the Los Angeles Basin of California, our position in the Marcellus Shale in northeastern Pennsylvania and our coalbed methane, or CBM, natural gas properties located in the Washakie Basin in southwestern Wyoming.

~~Warren~~As ~~owns~~of ~~certain~~December 31, ~~deep~~2016, ~~rights~~we ~~below~~owned anatural ~~portion~~gas ofand ~~the~~oil ~~Atlantic~~leasehold ~~Rim~~interests ~~CBM~~in ~~Project~~approximately 105,897 ~~which~~gross ~~include an approximate 58~~(80,~~949~~099 net) ~~acre position~~acres, ~~that~~approximately is66% ~~potentially~~of ~~prospective~~which ~~for~~are ~~hydrocarbon~~undeveloped. ~~production~~Substantially ~~from~~all ~~the~~our ~~Niobrara~~undeveloped ~~Shale and other deep formations. The~~ acreage is ~~primarily~~ located in ~~the~~Wyoming. ~~southern~~We ~~portion~~have ofidentified ~~the~~approximately ~~Eastern~~140 ~~Washakie~~gross ~~Basin~~drilling locations in ~~Wyoming~~ ~~and~~our isWilmington ~~adjacent~~field tounits. ~~and~~Additionally, ~~north~~we ofhave ~~the~~identified ~~Colorado~~approximately 140 ~~border.~~gross ~~Deep~~ drilling ~~activity~~locations ~~offsetting~~on our acreage ~~position~~in ~~took~~Wyoming, ~~place~~primarily inon ~~2015~~80-acre ~~and~~well isspacing ~~tracked~~and by74 gross ~~the~~drilling ~~company~~locations onin athe ~~consistent~~Marcellus ~~basis~~Shale.

~~Warren estimates~~As ~~that~~of ~~the~~December 31, ~~Niobrara~~2016, ~~Shale~~we ~~formation~~had isestimated atnet ~~depths~~proved ~~between~~reserves of 25.4 MMBoe,~~000~~ ~~and~~with a PV-10 Value of $28.4 million,~~000~~ ~~feet~~based on a reserve report prepared by Netherland, Sewell & Associates, Inc. ~~Successful~~These ~~Niobrara~~estimated ~~Shale~~net ~~oil~~proved ~~wells~~reserves ~~have~~include ~~been~~4.7 ~~developed~~MMBbls in ~~southern~~our ~~Wyoming~~Wilmington ~~and northern~~units ~~Colorado~~(19%), 93.5 ~~The~~Bcf ~~Company~~in isour ~~considering~~Marcellus ~~possibilities~~field ~~for~~in ~~developing~~Pennsylvania (61%) and 28.4 Bcf in our CBM program in the ~~Niobrara~~Washakie ~~Shale~~Basin ~~and~~(19%). ~~other~~These ~~deep~~estimated ~~formations,~~net ~~including~~proved ~~joint~~reserves ~~ventures,~~are ~~cooperative~~located ~~development~~on ~~agreements~~approximately ~~and~~30% ~~joint~~of ~~participation agreements~~our total net acreage.

~~Oil~~As of December 31, 2016, we had interests in 668 gross (507.7 net) producing wells and ~~Natural~~are ~~Gas~~the ~~Reserves~~ operator for 87% of these wells. For December of 2016, our average daily production was 13.7 MBoe/d gross (11.1 MBoe/d net). For 2017, we have a projected total capital expenditure budget of approximately $8.5 million.

~~Third~~The ~~Party~~Company ~~Reserve~~was ~~Reporting~~incorporated on June 12, 1990 as a Delaware corporation for the purpose of acquiring and ~~Controls~~developing ~~Over~~Oil ~~Reserve~~& ~~Report~~ Gas Properties. The Company was incorporated under the laws of the state of Maryland prior to its reincorporation in the state of Delaware effective October 5, 2016.

The ~~reserves~~Company’s ~~estimates~~principal ~~shown~~executive ~~herein~~offices ~~for~~are ~~the~~located ~~years~~at ~~ended~~Two ~~December 31~~Lincoln Centre, ~~2015~~5420 ~~and~~LBJ ~~2014 have been independently evaluated by Netherland~~Freeway, ~~Sewell &~~Suite ~~Associates~~600, ~~Inc.~~ ~~("NSAI")~~Dallas, aTexas ~~worldwide~~75240 ~~leader~~and ofthe Company’s ~~petroleum~~telephone ~~property~~number ~~analysis~~is ~~for~~(214) ~~industry~~393-9688. ~~and~~Warren ~~financial~~makes ~~organizations~~available ~~and~~free ~~government~~of ~~agencies.~~charge ~~NSAI's~~on ~~Letter~~its iswebsite ~~filed as~~at anwww.warrenresources.com ~~exhibit~~its toannual ~~this~~reports on Form 10-K., ~~NSAI~~quarterly ~~was~~reports ~~founded~~on inForm ~~1961~~10-Q, ~~and~~current ~~performs~~reports ~~consulting~~on ~~petroleum~~Form ~~engineering~~8-K ~~services~~and ~~under~~amendments ~~Texas~~to ~~Board~~those ofreports ~~Professional~~as ~~Engineers~~soon ~~Registration~~as ~~No. F-2699.~~reasonably ~~Within~~practicable ~~NSAI,~~after the ~~technical~~Company ~~persons~~electronically ~~primarily~~files ~~responsible~~such ~~for~~material ~~preparing~~with, ~~the~~or ~~estimates~~furnishes ~~set~~it ~~forth~~to, in the ~~NSAI~~Securities ~~reserve~~and ~~report~~Exchange ~~incorporated~~Commission ~~herein are Mr~~(“SEC”). C. ~~Ashley~~Any ~~Smith~~materials ~~and~~that ~~Mr. Shane~~the ~~M. Howell.~~Company ~~Mr. Smith~~ has ~~been~~filed ~~practicing~~with ~~consulting~~the ~~petroleum~~SEC ~~engineering~~may atbe ~~NSAI~~read ~~since~~and ~~2006.~~copied ~~Mr. Smith~~at ~~is a Licensed Professional Engineer in~~ the ~~State of Texas (No. 100560) and has~~SEC’s ~~over~~Public ~~15 years~~Reference ofRoom ~~practical~~at ~~experience~~100 inF ~~petroleum engineering~~Street, ~~with over 9 years of experience in the estimation and evaluation of reserves~~N. MrE. ~~Howell is a Licensed Professional Geoscientist in the State of Texas~~, ~~Geology~~Room ~~(No. 11276) and has over 18 years of practical experience in petroleum geosciences~~1580, ~~with over~~Washington 10D.~~5 years~~C. of20549 ~~experience~~or inaccessed via the ~~estimation~~SEC’s ~~and~~website ~~evaluation~~address ofat ~~reserves~~www.sec.gov. ~~These~~The ~~NSAI~~public ~~reserve~~may ~~estimates~~also ~~are~~obtain ~~reviewed~~information byabout ~~our~~the ~~in-house~~operation ~~petroleum engineers and geoscientists who oversee and control preparation~~ of the ~~reserve~~Public ~~report~~Reference ~~data~~Room by ~~working with NSAI to ensure~~ calling the ~~integrity,~~SEC ~~accuracy~~at ~~and timeliness of data furnished to NSAI for their evaluation process~~1-800-SEC-0330. ~~Warren's technical person who was primarily~~

15Reorganization Under Chapter 11 and Emergence from Bankruptcy

~~Table~~On June 2, 2016, the Company and certain of ~~Contents~~its wholly owned subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Case No. 16-32760. The Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The subsidiary Debtors in the Chapter 11 Cases were Warren E&P, Inc. (“Warren E&P”), Warren Resources of California, Inc. (“Warren California”), Warren Marcellus, LLC (“Warren Marcellus”), Warren Energy Services, LLC and Warren Management Corp. (together, the “Chapter 11 Subsidiaries”), which represent all subsidiaries of the Company. On September 14, 2016, the Bankruptcy Court entered an order (the “Confirmation Order”) approving the Plan of Reorganization of Warren Resources, Inc. and Its Affiliated Debtors (as amended and supplemented, the “Plan”). On October 5, 2016 (the “Effective Date”), the Plan became effective pursuant to its terms, and the Debtors completed their reorganization under the Bankruptcy Code.

~~responsible for~~The ~~overseeing~~description of the ~~preparation~~Plan ofcan ~~our~~be ~~reserve~~found ~~estimates~~in ~~was~~ its entirety ~~Vice~~by ~~President~~reference ofto ~~Operations.~~the Hefull ~~has~~text ~~over 9 years~~ of ~~experience in~~ the ~~oil~~Confirmation ~~and gas industry~~Order, ~~including~~filed ~~6 years~~ as ~~either~~Exhibit ~~a reserve evaluator or manager~~2.1 ~~His~~to ~~professional~~the ~~qualifications~~Company’s ~~include~~Current aReport ~~bachelor's~~on ~~degree~~Form in8-K ~~Petroleum~~filed ~~Engineering~~with ~~from~~ the ~~Colorado~~Securities ~~School of Mines~~ and ~~membership~~Exchange inCommission (the ~~Society of~~“SEC”) ~~Petroleum~~on ~~Engineers~~September 20, 2016.

The ~~reserves~~ ~~information~~reorganization inunder ~~this~~Chapter ~~annual~~11 ~~report~~substantially onreduced ~~Form 10-K~~indebtedness ~~represents~~and ~~only~~restructured ~~estimates.~~the ~~There~~Company’s balance ~~are~~sheet. aThroughout ~~number~~the ofcourse ~~uncertainties inherent in estimating quantities~~ of ~~proved~~the ~~reserves, including~~Chapter ~~many~~11 ~~factors beyond our control~~reorganization, ~~such~~we aswere ~~commodity~~able ~~pricing.~~to ~~Reserve~~conduct ~~engineering~~normal isbusiness aactivities ~~subjective process of estimating underground accumulations of oil~~ and ~~natural~~pay ~~gas~~associated ~~that~~obligations ~~cannot~~for bethe ~~measured in~~period anfollowing ~~exact manner. The accuracy of any reserve estimate is a function of~~ the ~~quality~~bankruptcy offiling ~~available data~~ and ofpaid ~~engineering~~certain per-petition ~~and~~obligations, ~~geological~~including ~~interpretation~~employee wages and ~~judgment. As a result~~benefits, ~~estimates~~goods ~~of different~~and ~~engineers~~services ~~may~~provided ~~vary.~~by Incertain ~~addition~~vendors, ~~results~~transportation of ~~drilling,~~our ~~testing and~~ production ~~subsequent to the date of an estimate may lead to revising the original estimate either negatively or positively. Accordingly~~, ~~initial~~and ~~reserve~~royalties ~~estimates are often different from the quantities of oil~~ and ~~natural~~costs ~~gas~~incurred ~~that are ultimately recovered. The meaningfulness of such estimates depends primarily~~ on the ~~accuracy~~ ofCompany’s ~~the assumptions upon which they were based. Except to the extent that we successfully develop our inventory of probable and possible locations, have positive revisions, acquire additional~~behalf ~~properties~~by ~~containing~~other ~~proved~~working ~~reserves~~interest ~~or conduct successful exploration and development activities or both, our proved reserves will decline as reserves are produced~~owners. ~~For~~As ~~additional~~a ~~information regarding~~result ~~estimates~~ of ~~proved~~the ~~reserves~~reorganization, ~~the~~we ~~preparation~~now ofhave ~~such~~an ~~estimates~~improved bycapital ~~NSAI~~structure and ~~other~~enhanced ~~information~~financial ~~about our oil and natural gas reserves, see Note K Oil and Gas Reserve Data (Unaudited) to the Consolidated Financial Statements in Item 8~~flexibility.

~~The current~~10 SEC rules require that the reserve estimates are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2015. For oil volumes, the average West Texas Intermediate posted price of $46.79 per barrel is adjusted for quality, transportation fees, and market differentials. For gas volumes, the average Henry Hub spot price of $2.59 per MMBtu is adjusted for energy content, transportation fees, and market differentials. All prices are held constant throughout the lives of the properties. The average adjusted product prices weighted by production over the remaining lives of the properties are $42.81 per barrel of oil and $1.74 per Mcf of gas. All prices and costs associated with operating wells were held constant in accordance with the SEC guidelines.

The commodityTable price assumptions described above exceed the current market price of oil and gas. Therefore we may have a substantial downward adjustment in our estimated proved reserves in the future if the current low commodity price environment persists. Contents

EstimatedIndex Provedto Reserves Financial Statements

~~The~~Fresh ~~following~~Start ~~table~~Accounting ~~presents our estimated proved natural gas and oil reserves and the PV-10 value of our interests in net reserves in producing properties as of December 31, 2015 and 2014 based upon~~

16The Company elected to apply fresh start accounting effective September 30, 2016, to coincide with the timing of its normal fourth quarter reporting period, which resulted in Warren becoming a new entity for financial reporting purposes. The Company evaluated and concluded that events between October 1, 2016 and October 5, 2016 were immaterial and the use of an accounting convenience date of September 30, 2016 was appropriate. As such, fresh start accounting is reflected in the accompanying consolidated balance sheet as of December 31, 2016 and related fresh start adjustments are included in the accompanying statement of operations for the period from January 1, 2016 through September 30, 2016 (Predecessor).

~~Table~~As a result of ~~Contents~~the application of fresh start accounting and the effects of the implementation of the Plan, the financial statements after September 30, 2016 (Successor) will not be comparable with the financial statements prior to that date. References to the “Successor” relate to Warren subsequent to September 30, 2016. References to the “Predecessor” refer to Warren on and prior to September 30, 2016.

~~reserve reports~~Business ~~prepared~~Strategy ~~by NSAI. The PV-10 values shown in the table are not intended to represent the current market value of the estimated natural gas and oil reserves we own.~~

	Years Ended December 31,
	2015		2014
Estimated Proved Oil and Natural Gas Reserves:
Net oil reserves (MBbls):
Proved developed		6,824		8,561
Proved undeveloped		6,115		8,233

Total		12,939		16,794



Net natural gas reserves (MMcf):
Proved developed		153,093		203,272
Proved undeveloped		10,638		124,056

Total		163,731		327,328



Total Net Proved Oil and Natural Gas Reserves (MBoe)		40,228		71,349



Estimated Present Value of Net Proved Reserves (in thousands):
PV-10 Value
Proved developed	$	85,147	$	460,059
Proved undeveloped		10,876		149,067

Total(1)		96,023		609,126
Less: future income taxes, discounted at 10%		—		54,059

Standardized measure of discounted future net cash flows(2)	$	96,023	$	555,067



Prices Used in Calculating Reserves:
Oil (per Bbl)	$	42.81	$	86.71
Natural Gas (per Mcf)	$	1.74	$	3.22
Proved Developed Reserves (MBoe)		32,339		42,439

The principal elements of our business strategy are designed to grow our oil and gas reserves, production volumes and cash flows at a positive return on invested capital. We intend to accomplish this by focusing on the following key strategies:

• ~~(1)The PV-10~~Acquire ~~Value~~Additional ~~represents~~Assets. ~~the~~We ~~future~~will ~~net~~continue ~~cash flows attributable~~ to ~~our~~review ~~proved~~asset ~~oil~~acquisitions ~~and gas reserves before income tax, discounted at 10% per annum. Although it is a non-GAAP measure, we believe~~ that ~~the~~meet ~~presentation of the PV-10 Value is relevant and useful to~~ our ~~investors~~economic ~~because~~criteria itwith ~~presents~~a ~~the~~focus ~~discounted~~on ~~future~~development ~~net cash flows attributable to our proved reserves prior to taking into account future corporate income taxes and our current tax structure. We use this measure when assessing the~~ potential ~~return on investment related to our oil and gas properties. Our reconciliation~~ of this non-GAAP financial measure is shown in the table as the PV-10, less future income taxes, discounted at 10% per annum, resulting in the standardized measure of discounted future net cash flows. The standardized measure of discounted future net cash flows represents the present value of future cash flows attributable to our proved oil and ~~natural~~ gas ~~reserves~~properties ~~after~~that ~~income~~can ~~tax,~~be ~~discounted~~developed at ~~10%.~~a Inreasonable ~~accordance with SEC requirements, our reserves and the future net revenues at December 31, 2015 and 2014 were determined using average monthly pricing for 2015 and 2014~~cost. These prices reflect adjustment by lease for quality, transportation fees and regional price differences. (2)Standardized measure of discounted future net cash flows differs from PV-10 value because it includes the effect of future income taxes.

17• Exploit Existing Properties Through the Drillbit. We seek to maximize the value of our existing asset base by developing properties that have production and reserve growth potential while also attempting to control production costs. We have identified a total of approximately 140 gross oil well drilling locations in our Wilmington Field oil properties, 74 gross drilling locations in the Marcellus Shale and 140 gross drilling locations in our Wyoming CBM properties, which we plan to develop using capital expenditures within cashflow from operations. Our drilling locations are located in mature fields with established production profiles and supported by existing infrastructure and end markets. Drilling locations may not have reserves associated with them at this time due to economic constraints.

• Increase ~~Table~~Production and Increase Proved Developed Producing Reserves from our Existing Oil and Gas Asset Base. We intend to increase our proved reserves and production in future years by drilling wells on our properties with undeveloped reserves or with resource potential, which represents approximately 66% of ~~Contents~~our acreage position at December 31, 2016.

~~The~~• ~~data~~Invest inour ~~the~~Capital ~~above~~in ~~natural~~a ~~gas~~Disciplined Manner and ~~oil~~Maintain ~~reserves~~a ~~table~~Strong ~~represents~~Financial ~~estimates only~~Position. ~~Oil~~We ~~and~~focus ~~natural~~on ~~gas~~utilizing ~~reserve~~our ~~engineering~~available iscapital ~~inherently~~on aprojects ~~subjective~~where ~~process~~we ~~of estimating~~are ~~underground~~likely ~~accumulations~~to ofhave ~~oil~~success in increasing production and/or ~~natural~~proved ~~gas~~reserves at attractive returns. We believe that ~~cannot~~maintaining bea ~~measured~~strong ~~exactly~~financial position will allow us to capitalize on investment opportunities in all commodity cycles. ~~The~~Our ~~accuracy~~capital ofprograms ~~any~~are ~~reserve~~generally ~~estimate~~developed isto abe ~~function~~funded ofthrough internally generated cash flows and the ~~quality~~use of ~~available~~our ~~data~~credit ~~and~~line, ~~engineering~~but ~~and geological~~we ~~interpretation~~also ~~and~~may ~~judgment.~~obtain ~~Accordingly~~alternative sources of capital to develop our assets through partnerships, ~~reserve~~joint ~~estimates~~ventures ~~may~~or ~~vary~~other ~~from~~investment ~~the~~opportunities ~~quantities~~with third parties or additional debt or equity. We hedge a portion of ~~oil~~our production and ~~natural~~generally ~~gas~~utilize ~~that~~long-term ~~are~~sales ~~ultimately~~contracts ~~recovered.~~to ~~See~~maintain ~~"Item 1A:~~a ~~Risk~~strong ~~Factors."~~financial position and provide us with cash flow necessary for the development of our assets.

~~PV-10 is~~• ~~equal~~Reduce toCosts ~~the~~Through ~~future~~Economies ~~net~~of ~~cash~~Scale flows from our proved reserves, excluding any future income taxes, discounted at 10% per annum ("PV-10"). Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and ~~operating~~Efficient ~~methods~~Operations. ~~Proved~~As ~~undeveloped~~we ~~reserves~~continue ~~are proved reserves that are expected~~ to beincrease ~~recovered~~our ~~from~~production ~~new wells drilled to known reservoirs for which the existence~~ and ~~recoverability~~develop ofour ~~such reserves can be estimated with reasonable certainty or from~~ existing ~~wells~~properties, onwe ~~which~~expect athat ~~relatively~~our ~~major~~cost ~~expenditure is~~structure ~~required~~will tobenefit ~~establish production. PV-10 may be considered a non-GAAP financial measure as defined by Item 10(e) of Regulation S-K and is derived~~ from ~~the~~economies ~~standardized measure~~ of ~~discounted~~ ~~future net cash flows which is the most directly comparable GAAP financial measure~~scale. ~~PV-10 is a computation of the standardized measure of discounted future net cash flows on a pre-tax basis.~~ We ~~believe~~seek ~~that the presentation of the PV-10 is relevant and useful~~ to ~~investors~~exert ~~because~~more itcontrol ~~presents~~over ~~the~~costs ~~discounted future net cash flows attributable to our proved reserves prior to taking into account future corporate income taxes~~ and ittiming isin ~~a useful measure for evaluating the relative monetary significance of~~ our ~~oil~~exploration, ~~and natural gas properties. Further~~development, ~~investors~~production ~~may utilize the measure as a basis for comparison of the relative size~~ and ~~value~~operating ~~of our reserves to other companies~~activities. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. However, PV-10 is not a substitute for the standardized measure of discounted future net cash flows.

~~Oil and~~• ~~gas~~Control ~~prices~~Operations ~~significantly impact the calculation of the PV-10~~ and ~~the~~Costs ~~standardized~~in ~~measure~~Depressed ofCommodity ~~discounted~~Price ~~future net cash flows~~Environment. ~~The~~We ~~present~~seek ~~value of future net cash flows does not purport~~ to beserve anas ~~estimate of~~ the ~~fair~~operator ~~market value~~ of the ~~Company's~~wells ~~proved reserves. An estimate of fair value would also take into account, among other things, anticipated changes~~ in ~~future~~which ~~prices and~~we ~~costs,~~have ~~the expected recovery of reserves in excess of proved reserves and~~ a ~~discount~~significant ~~factor~~interest. ~~more~~As ~~representative~~the ofoperator, ~~the~~we ~~time~~are ~~value~~better ofpositioned ~~money~~to ~~and~~control the ~~risks~~timing ~~inherent in producing oil~~ and ~~gas.~~plans ~~Future prices received~~ for ~~production~~future enhancement and ~~costs~~exploitation ~~may vary~~efforts, ~~perhaps significantly, from~~ the ~~prices and~~ costs ~~assumed for purposes~~ of ~~these~~drilling, ~~estimates. The 10% discount factor used to calculate present value~~completing, ~~which~~ isenhancing ~~required~~and byproducing ~~Financial~~the ~~Accounting Standard Board pronouncements~~wells, ~~may~~and ~~not necessarily be~~ the ~~most~~technical ~~appropriate~~expertise ~~discount~~to ~~rate.~~take ~~The~~advantage ~~present~~of ~~value,~~geological noand ~~matter~~operational ~~what~~opportunities. ~~discount~~We ~~rate~~believe isthis ~~used,~~enables ~~is materially~~us ~~affected by assumptions as~~ to ~~timing~~maximize ofboth ~~future~~ production, ~~which~~volumes ~~may~~and ~~prove~~wellhead ~~to be inaccurate~~prices.

~~There are~~Business ~~numerous~~Strengths uncertainties in estimating quantities of proved reserves and in projecting future rates of production and the timing of development expenditures, including many factors beyond our control. The reserve data set forth in this annual report on Form 10-K are only estimates. Although we believe these estimates to be reasonable, reserve estimates are imprecise and may be expected to change as additional information becomes available. Estimates of natural gas and oil reserves, of necessity, are projections based on engineering data and there are uncertainties inherent in the interpretation of this data, as well as the projection of future rates of production and the timing of development expenditures. Reservoir engineering is a subjective process of estimating underground accumulations of natural gas and oil that cannot be exactly measured. Therefore, estimates of the economically recoverable quantities of natural gas and oil attributable to any particular group of properties, classifications of the reserves based on risk of recovery and the estimates are a function of the quality of available data and of engineering and geological interpretation and judgment and the future net cash flows expected there from, prepared by different engineers or by the same engineers at different times, may vary substantially. There also can be no assurance that the reserves set forth herein will ultimately be produced or that the proved undeveloped reserves will be developed within the

18Balanced Asset Portfolio. Since 1999, we have grown our asset base and diversified our production through California oil property acquisitions in the Los Angeles Basin and natural gas property acquisitions in the Atlantic Rim Prospect, Washakie Basin in southwestern Wyoming and the Marcellus Shale in northeastern Pennsylvania. We believe our diverse asset base provides us with the flexibility to reallocate capital among our assets depending on fluctuations in natural gas and oil prices, as well as area economics.

~~Table~~11 ~~of Contents~~

periods anticipated.Table Actual production, revenues and expenditures with respect to our reserves will likely vary from estimates, and such variances may be material. In addition, the estimates of future net revenues from our proved reserves and the present value thereof are based upon certain assumptions about future production levels, prices and costs that may not be correct. Contents

With respectIndex to theFinancial estimates prepared by NSAI, PV-10 value should not be construed as representative of the fair market value of our proved natural gas and oil properties since discounted future net cash flows are based upon projected cash flows which do not provide for changes in natural gas and oil prices or for the escalation of expenses and capital costs. The meaningfulness of such estimates is highly dependent upon the accuracy of the assumptions upon which they are based. Actual future prices and costs may differ materially from those estimated. You are cautioned not to place undue reliance on the reserve data included in this annual report on Form 10-K. Under SEC guidelines, prices used in computing reserves at December 31, 2015 and 2014 are based on 12 month average pricing for 2015 and 2014, respectively. Statements

Long -Lived Proved Reserves with Stable Production Characteristics. Our properties ~~Productive~~generally ~~Wells~~ have long reserve lives and reasonably stable and predictable well production characteristics, with a ratio of total estimated proved reserves to production of approximately 6 years.

~~The~~Low-Risk ~~following~~Multi-Year ~~table~~Drilling ~~sets~~Inventory ~~forth~~in Established Resource Plays. Most of our drilling ~~gross~~locations are located in proven resource plays that possess low geologic risk and ~~net~~lead ~~productive~~to ~~wells~~predictable asdrilling results. We have identified approximately 140 gross drilling locations in our California assets that have an average vertical depth of ~~December 31~~less than 4,000 ~~2015:~~feet and are located in areas where we are an established driller and producer and 74 gross drilling locations in the Marcellus Shale.

	Oil Wells				Natural Gas Wells				Total
	Gross		Net		Gross		Net		Gross		Net
California		185		183		—		—		185		183
New Mexico		2		0.03		22		2.3		24		2.3
Pennsylvania		—		—		33		24.2		33		24.2
Texas		—		—		10		2.6		10		2.6
Wyoming		—		—		316		199.1		316		199.1
Other		2		0.1		—		—		2		0.1

Total		189		183.13		381		228.2		570		411.3

Operational control and financial flexibility. As of December 31, 2016, we were the operator of record for 87% of our producing wells. We generally prefer to retain operating control over our properties, which allows us to more effectively control operating costs, timing of development activities and technological enhancements, marketing of production, and allocation of our capital budget. In addition, the timing of most of our capital expenditures is discretionary, which allows us a significant degree of flexibility to adjust the size of our capital budget. We limited our capital expenditure budget for 2017 to an estimated $8.5 million, compared to $5.1 million of development cost in 2016. Because of the decline in oil and gas prices, we have chosen to finance our 2017 capital expenditure budget primarily through our internally generated operating cash flows.

~~Gross~~Experienced management and operational teams. Our core team of technical staff and ~~wells~~operating ~~represent~~managers ~~all~~have ~~wells~~broad industry experience, including experience in ~~which~~horizontal weand ~~have~~directional adrilling, ~~working~~waterflood ~~interest.~~recovery ~~Net~~operations, ~~wells~~Marcellus ~~represent~~development ~~the~~and ~~total~~CBM development and completion. Each of our ~~fractional~~operational ~~undivided~~teams ~~working~~in ~~interest~~our Pennsylvania, California and Wyoming projects has extensive operating experience in ~~those~~their ~~wells~~respective geographic areas. ~~Productive~~We ~~wells~~continue ~~include producing~~to ~~wells~~utilize technologies and ~~wells~~waterflood ~~mechanically~~recovery ~~capable~~practices ofthat will allow us to optimize production and improve the ultimate recoveries of crude oil on our California properties.

~~Drilling~~Areas ~~Activity~~ of Development Activities

~~The~~Our ~~following~~development ~~table~~activities ~~sets~~are ~~forth~~focused ~~the~~primarily ~~number~~on ofwaterflood ~~gross~~oil ~~exploratory~~recovery ~~and~~projects ~~gross~~in ~~development~~the ~~wells~~Wilmington ~~drilled~~field in ~~which~~California, weCBM ~~participated~~projects ~~during the~~in ~~last~~Wyoming ~~two~~and ~~fiscal~~our ~~years.~~Marcellus ~~The~~Shale ~~number~~project ofthat ~~wells~~utilizes ~~drilled~~horizontal ~~refers~~drilling toand ~~the~~hydraulic ~~number~~fracturing oftechniques ~~wells~~to ~~completed~~develop atdry ~~any~~natural ~~time~~gas. ~~during~~The ~~the~~table ~~respective~~below ~~fiscal~~highlights ~~year.~~our ~~Productive~~main ~~wells~~areas ~~are~~of ~~either~~activity ~~producing~~as ~~wells or wells capable~~ of ~~commercial~~December 31, ~~production.~~2016 (Successor):

	Years Ended December 31,
Area	Gross Acres			Net Acres				NetUndevelopedAcreage
	2015					2014
Atlantic Rim Project, Wyoming		90,143			70,010				47,171
	Gross		Net						Net
Wilmington Field, California		2,476			2,460				1,211
Exploratory Wells
Marcellus, Pennsylvania		6,513			5,288				2,697
Productive		—		—			—			—
Pacific Rim Project, Wyoming		197			87				87
Dry		—		—			—			—
Other(1)		6,568			2,254				1,317
Development Wells
Total		105,897			80,099				52,483
Productive		2		1.6			67			58.9
Dry		—		—			—			—

Total		2		1.6			67			58.9

19(1) Includes conventional oil and gas properties located primarily in New Mexico and Texas.

~~Table~~California Projects ~~of Contents~~

~~Natural~~Wilmington ~~Gas~~Townlot ~~and~~Unit ~~Oil Acreage~~

~~The~~Our ~~following~~Wilmington ~~table~~Townlot ~~sets~~Unit ~~forth~~(“WTU”) ~~our~~is ~~acreage~~located ~~position~~in asthe Wilmington field within the Los Angeles Basin of ~~December 31~~California. The WTU, ~~2015:~~a unitized oil field consisting of 1,440 gross (1,424 net) acres, has produced more than 156 million barrels of oil from primary and secondary production. All the working interests in the WTU are subject to the terms and provisions of a unit operating agreement. We own an approximate 98.9% undivided working interest in the WTU.

	Developed				Undeveloped				Total
	Gross		Net		Gross		Net		Gross		Net
California		1,388		1,376		1,089		1,084		2,477		2,460
New Mexico		3,224		465		921		195		4,145		660
Pennsylvania		3,191		2,591		3,321		2,697		6,512		5,288
Texas		704		176		—		—		704		176
Wyoming		29,467		22,839		61,310		47,705		90,777		70,544
Other		440		138		1,280		1,280		1,720		1,418

Total		38,414		27,585		67,921		52,961		106,335		80,546

The net average oil production for the three months ended December 31, 2016, was approximately 1,698 barrels of oil per day (“Bbls/d”), in the WTU, compared to 2,018 Bbls/d net production during three months ended December 31, 2015. As of December 31, 2016, there were 186 gross (184 net) productive wells. Productive wells include producing wells and wells mechanically capable of production. In addition, estimated proved reserves as of December 31, 2016 were 5.8 MMbbls gross (4.7 MMbbls net), of which approximately 85% are PDP or PDNP and 15% are PUDs.

~~The primary~~12 terms of the Company's oil and gas leases expire on various dates in any given year. All of the Company's proved acreage is perpetuated by production, unitization or by continuous operations. This means that the Company will maintain its rights in these leases as long as natural gas or oil is produced in paying quantities or operations are conducted on the acreage by the Company or other parties holding interests in those leases. In some cases, if production from a lease ceases, the lease will expire, and in other cases, if production or royalty payments attributable to any lease is interrupted or ceases, the Company may maintain the lease by unit production or conducting operations on the unit or lease.

The CompanyTable has approximately 3,829, 427, and 28,781 net acres subject to leases with primary terms that expire in 2016, 2017 and 2018, respectively. Leases covering 4,391 net acres expired in 2015. The Company in the past has been and expects in the future to be able to extend the terms of some of these leases by conducting operations thereon or by exchanging or selling some of these leases to or with other companies. The Company does not expect to lose material developed lease acreage as a result of a failure to drill, inadequate capital, equipment, or personnel. However, if the BLM does not approve Warren's optimization activities or 25 gross CBM wells are not drilled on or before September 11, 2016, the Company has approximately 31,887 total net leasehold acres subject to contraction in the Spyglass Hill Unit. Contents

These sameIndex leases will also expire in 2018 as to approximatelyFinancial 30,182 total net deep acres, unless the leases are otherwise perpetuated by unitization, development or other means. Based on the Company's evaluation of prospective economics, the Company has allowed acreage to expire and will continue to allow additional acreage to expire in the future. Statements

~~Production~~North ~~Volumes,~~Wilmington ~~Sales~~Unit ~~Prices and Production Costs~~

The ~~following~~North ~~table~~Wilmington ~~summarizes~~Unit ~~our~~(“NWU”), ~~net~~a ~~natural~~unitized ~~gas~~oil ~~and~~field ~~oil~~consisting ~~production~~of ~~volumes~~1,036 ~~average~~gross ~~sales~~and ~~prices~~net ~~and~~acres, ~~expenses~~is ~~for~~located in the ~~periods~~Wilmington oil ~~indicated.~~field ~~Our~~adjacent ~~production~~to isour ~~attributable~~existing toWTU. ~~our~~All ~~direct~~working interests in ~~producing~~the ~~properties.~~NWU ~~For~~are ~~these~~subject ~~purposes,~~to ~~our~~the ~~net~~terms ~~production~~and ~~will~~provisions beof ~~production~~a ~~that~~unit isoperating ~~owned~~agreement. byWe ~~us,~~own ~~after~~a ~~deducting~~100% ~~royalty, limited~~working ~~partner~~interest and ~~other~~an ~~similar~~approximate ~~interests~~84.7% ~~The~~net ~~lease~~revenue ~~operating~~interest ~~expenses~~in ~~shown~~the NWU, including existing wells, certain equipment and certain surface properties.

20The net average oil production for the three months ended December 31, 2016 was 329 Bbls/d in the NWU, compared to 462 Bbls/d net production during three months ended December 31, 2015. As of December 31, 2016, there were 46 gross and net productive wells in the NWU. There were no estimated proved reserves as of December 31, 2016.

~~Table~~Pennsylvania ofMarcellus ~~Contents~~Shale Project

~~relates~~Our Pennsylvania properties consist of a concentrated, contiguous acreage position located in Wyoming County, Pennsylvania in the northeast toportion ~~our~~of ~~net~~the ~~production~~Marcellus Shale play. InWe ~~addition~~operate approximately 6,513 ~~this~~gross ~~table~~(5,288 ~~summarizes~~net ~~our~~acres in the Lower Marcellus Shale and 3,966 net acres in the Upper Marcellus Shale). We hold an approximate 75% working interest and an approximate 60% net revenue interest in these Lower Marcellus assets and an approximate 56% working interest and 45% net revenue interest in these Upper Marcellus assets. The Marcellus assets net average gas production for ~~each~~the ~~field~~three ~~that~~months ~~contains~~ended ~~15%~~December 31, or2016 ~~more~~was approximately 44.4 MMcfe/d. We have 34 gross (25 net) productive wells, three of ~~our~~which ~~total~~are located in the Upper Marcellus and the remainder in the Lower Marcellus. We plan to complete one additional drilling location in the Lower Marcellus. Estimated net proved reserves: as of December 31, 2016 were 93.5 Bcfe, of which 89.6% are PDP. The assets include a robust and scalable infrastructure system that will enable us to further our development of the Marcellus Assets, including a gathering and compression system, takeaway capacity to end markets, a significant local customer, and abundant water supply.

	Years Ended December 31,
	2015		2014
Production:
Oil (MBbls)
Wilmington Field		980.3		1,118.3

Total		980.3		1,118.3



Natural Gas (MMcf)
Marcellus		22,943.3		9,784.8
Atlantic Rim		4,709.8		5,897.0
Other		380.2		403.0

Total		28,033.3		16,084.8



Production:
Total MBoe(1)		5,652.5		3,799.1
Average Sales Price Per Unit:
Oil (per Bbl)	$	41.14	$	86.02
Natural gas (per Mcf)	$	1.55	$	3.06
Weighted average sales price (per Boe)	$	14.81	$	38.27
Expenses (per Boe):
Lease operating expense(2)	$	8.76	$	12.73

Atlantic Rim Projects in the Washakie Basin, Wyoming

The ~~(1)Natural gas~~Washakie ~~reserves~~Basin ~~are~~is ~~converted~~located toin ~~oil reserves using a ratio of six Mcf to one Bbl of oil. This ratio does not assume price equivalency and, given price differentials,~~ the ~~price~~southeast ~~for~~portion ~~a barrel~~ of ~~oil equivalent for natural gas may differ significantly from~~ the ~~price~~Greater ~~for~~Green aRiver ~~barrel~~Basin ofin ~~oil.~~southwestern ~~(2)Lease operating~~Wyoming ~~expenses~~and ~~related~~represents to our ~~CBM~~largest ~~operations~~acreage ~~include~~position. ~~costs~~As ~~for~~of ~~operating~~December 31, ~~our~~2016, ~~commercially~~we ~~productive~~owned ~~CBM wells~~90,143 ~~together~~gross ~~with~~(70,010 ~~the~~net) ~~costs~~acres prospective for ~~operating~~ ~~our~~ CBM ~~wells~~development ~~that are still~~ in ~~the~~this ~~dewatering~~area, ~~phase~~of ~~and~~which ~~are~~47,171 net acres ~~not~~were ~~yet commercially productive~~undeveloped.

The net average gas production for our Wyoming assets for the three months ended December 31, 2016 was approximately 11.7 MMcfe/d. We ~~Crude~~have ~~Oil~~386 ~~and~~gross ~~Natural~~(248.7 ~~Gas~~net) ~~Marketing~~ productive wells in the Washakie Basin. Estimated net proved reserves as of December 31, 2016 were 28.4 Bcfe, of which 100% are PDP and PDNP.

WeAtlantic ~~sell~~Rim ~~our~~Project oil and natural gas to various purchasers in the areas where the oil and natural gas is produced. Our revenues are highly dependent upon the prices of, and demand for, oil and natural gas. The markets for oil and gas have historically been volatile and are likely to continue to be volatile in the future. The prices we receive for our oil and gas production are subject to wide fluctuations and depend on numerous factors beyond our control, including location and quality differentials, seasonality, economic conditions, foreign imports, political conditions in other oil-producing and gas-producing countries, the actions of OPEC, and domestic government regulation, legislation and policies. Decreases in oil and gas prices have had, and could have in the future, an adverse effect on the carrying value and volumes of our proved reserves and our revenues, profitability and cash flow.

~~For 2015,~~Our ~~the~~Atlantic ~~largest~~Rim ~~purchasers~~project ~~and~~comprises ~~marketers~~approximately of90,143 ~~our~~gross ~~total~~(70,010 ~~oil~~net) ~~and~~acres ~~gas~~on ~~production~~the ~~were~~eastern ~~Clearwater~~rim ~~Enterprises,~~of ~~Phillips~~the 66Washakie ~~Company~~Basin. ~~and~~As ~~Devlar~~of December 31, ~~Energy~~2016, ~~which~~we ~~accounted~~had ~~for~~drilled ~~41%,~~a ~~48%~~total ~~and 9%,~~of ~~respectively~~316 wells. Currently, ofwe are developing our ~~total~~acreage ~~production~~in ~~sold~~the Atlantic Rim project within the Spyglass Hill Unit.

~~All of~~Spyglass ~~our~~Hill ~~oil~~Unit reserves are located in California and are sold into a transportation pipeline which delivers our oil production to Phillips 66 Company, which operates a refinery in nearby Carson, California. All of our oil production in California is attributable to heavy crude (generally 21 degree

21Warren operates the U.S. Bureau of Land Management (the “BLM”) approved Spyglass Hill Unit in the Atlantic Rim area, which covers approximately 113,290 total gross acres (the “Unit”). Effective September 11, 2016, the Spyglass Hill Unit contracted down to 28,948 gross acres, which contains three Participating Areas. All producing wells within Spyglass Hill Unit are situated within Grace Point Participating Area, Sun Dog Participating Area or Doty Mountain Participating Area.

Table of Contents


Spyglass Hill Unit, Wyoming Participating Areas	Total Acres in Participating Area		Warren Gross Acres in Participating Area		Warren Net Acres in Participating Area
“A” Grace Point		6,362		6,082		5,157
“B” Doty Mountain		11,495		10,335		9,118
“C” Sun Dog		11,091		10,406		7,689

Total		28,948		26,823		21,964

~~API gravity~~13 crude oil or lower). The market price for California crude oil differs from the established market indices in the U.S., due principally to the higher transportation and refining costs associated with heavy oil. Effective August 1, 2012, we entered into an oil purchase contract with Phillips 66 Company whereby the Company sells its oil at the average Midway Sunset posted price for the month less $4.20 per barrel plus a premium for a gravity adjustment which should approximate $0.20 per barrel. For 2015, Warren received a weighted average price of approximately 91% of the NYMEX index price for crude oil sold under the Phillips 66 contract.

Our naturalTable gas production in Pennsylvania and Wyoming is delivered into natural gas pipelines for transportation and is sold to various purchasers for later re-marketing or end use. The majority of all of our natural gas is sold under monthly contracts that allow for periodic adjustments in pricing according to market demands. The prices and marketing of natural gas and oil can be affected by factors beyond our control, the effects of which cannot be predicted, including seasonal variations, general market supply and other fluctuations. In the Marcellus Shale, we sell our natural gas at the Tennessee Gas Pipeline (TGP, Zone 4) or the Transco-Leidy Line at market price less transportation fees. Both price points in the Marcellus and the Rocky Mountain Colorado Interstate Gas ("CIG") price typically have a negative basis differential below the NYMEX Henry Hub prompt month natural gas price. Fluctuations between spot and index prices can significantly impact the overall differential to the Henry Hub. In the Atlantic Rim of the Washakie Basin, Wyoming, we sell our natural gas at the CIG market price less transportation fees. We believe that the loss of any of these purchasers would not have a material adverse effect on our operations, as we believe there are a significant number of readily available purchasers in the market. For more information about the risks to our business posed by our marketing activities see "Item 1A: Risk Factors." Contents

HedgingIndex Activities to Financial Statements

WeWarren ~~have~~also ~~designed~~owns ainterests ~~risk~~in ~~management~~undeveloped ~~policy~~leases ~~for~~in the ~~use~~southern ofportion derivative instruments to provide partial protection against certain risks relating to our ongoing business operations, such as commodity price risk. We have an active commodity hedging program to mitigate the risks of the ~~volatile~~Atlantic ~~prices of oil and natural gas. Typically,~~Rim ~~we intend to hedge approximately 50% of our oil and natural gas production on a forward 12 to 18 month basis using a combination of swaps~~Project, ~~cashless collars and other financial derivative instruments with counterparties that we believe are creditworthy. Our decision on the quantity and price at~~ which ~~we choose to hedge our production is based in part on our view of current and future market conditions. While there~~ are ~~many~~prospective ~~different~~for ~~types~~multiple ofdeep ~~derivatives available, we typically use collar agreements and swap agreements to attempt to manage price risk more effectively~~formations. ~~The~~These ~~collar agreements~~leases are ~~put~~perpetuated ~~and~~by ~~call options used to establish floor and ceiling commodity prices for a fixed volume of~~ production ~~during~~or acommitment ~~certain time period. All collar agreements provide for payments~~ to ~~counterparties~~ if the ~~index price exceeds the ceiling and payments from the counterparties if the index price is below the floor~~Unit. ~~The~~Since ~~price swaps call for payments to, or receipts from, counterparties based on whether~~ the ~~market~~Unit ~~price~~contracted ofeffective ~~oil~~September 11, ~~natural gas~~2016, ~~and~~these ~~natural~~leases ~~gas~~were ~~liquids~~given ~~for~~a ~~the~~two year ~~period~~extension ~~is greater or less than~~ under the ~~fixed~~Spyglass ~~price~~Hill ~~established~~Unit ~~for that period when the swap is put in place~~Agreement. If the ~~index~~ ~~price~~leases ~~falls~~are ~~below~~not ~~the~~producing ~~floor~~in ~~price,~~paying ~~the~~quantities ~~counterparty~~or ~~pays~~committed usto ~~net~~a ofnew ~~the~~unit ~~fixed~~by ~~premium.~~September 11, ~~If the index price rises above floor price~~2018, ~~we pay~~ the ~~fixed~~leases ~~premium.~~will ~~For additional information on our hedging activities, see "Item 7A~~expire. ~~Quantitative and Qualitative Disclosures About Market Risk."~~

~~Our oil~~Midstream ~~and~~Assets ~~gas hedges run through 2016. Depending on market conditions and the results of our debt restructuring efforts, we expect to employ our hedging strategy at some level into 2017 and beyond.~~

Warren ~~Our~~owns ~~Service~~a 100% interest in the gas gathering, compression and ~~Operational~~pipeline ~~Activities~~midstream assets which serve the Atlantic Rim Project. The midstream assets consist of gathering and compression equipment and a 59 mile long pipeline that transports gas from the gathering systems throughout the Spyglass Hill Unit area to the Wyoming Interstate Company (WIC) interstate gas transportation pipeline.

~~Our~~Grace ~~drilling,~~Point ~~completion,~~Participating ~~production,~~Area ~~re-entry and land operations are conducted, managed and supervised for us through Warren E&P, Inc., our wholly owned subsidiary ("Warren E&P"). Through~~

22The Grace Point Participating Area contains 86 wells. The net average gas production for the three months ending December 31 2016, averaged approximately 933 gross Mcf/d of natural gas and 24,000 Bbls/d of water. Based on a report from Netherland, Sewell & Associates, Inc. as of December 31, 2016, estimated proved reserves for the wells in the Grace Point Participating Area were 1.8 gross (1.2 net) Bcf. We own an approximate 81% working interest in the wells drilled in the Grace Point Participating Area.

~~Table~~Doty ofMountain ~~Contents~~Participating Area

~~Warren E&P,~~The weDoty ~~employ~~Mountain ~~petroleum~~Participating ~~engineers,~~Area ~~geologists,~~currently ~~drilling~~contains ~~supervisors,~~107 ~~landmen~~wells. ~~and~~The ~~field~~net ~~supervisors.~~average ~~Warren~~gas ~~E&P~~production ~~also~~for ~~employs~~the ~~geologists~~three months ending December 31 2016, ~~engineers~~averaged approximately 7,947 Mcf/d and ~~other~~32,000 ~~personnel~~Bbls/d of water. Based on a ~~contract~~report ~~basis~~from Netherland, Sewell & Associates, Inc. Asas of December 31, ~~2015~~2016, ~~Warren~~estimated ~~E&P~~proved ~~was~~reserves for the ~~operator~~wells ofin ~~approximately~~the 94Doty Mountain sub-area were 30.6 gross (19.9 net) Bcf. We currently own an approximate 79% ofworking interest in the wells drilled in ~~which~~the weDoty ~~had~~Mountain ~~interests~~Participating Area.

~~Competition~~ Sun Dog Participating Area

~~The~~As ~~oil and natural gas industry is highly competitive and we compete with a substantial number~~ of ~~other companies that have greater financial and other resources. Many of these companies explore for~~December 31, ~~produce and market oil and natural gas~~2016, ~~as well as carry on refining operations and market~~ the ~~resultant~~Sundog ~~products~~Participating onArea acontained ~~worldwide basis~~122 wells. The ~~primary~~net ~~areas~~average ingas ~~which~~production ~~we encounter substantial competition are in locating and acquiring desirable leasehold acreage~~ for ~~our~~the ~~drilling~~three ~~and~~months ~~development operations, locating and acquiring~~ended ~~attractive~~December 31 ~~producing oil and natural gas properties~~2016, ~~obtaining~~averaged ~~sufficient~~approximately ~~availability of drilling and completion equipment and services~~1,896 ~~obtaining~~Mcf/d ~~purchasers~~ and ~~transporters~~approximately ~~of the oil and natural gas we produce and hiring and retaining key employees. In general~~40,500 ~~the~~Bbls/d bidding for natural gas and oil leases has become intense in the areas in which we operate with bidders evaluating potential acquisitions with varying product pricing parameters and other criteria that result in widely divergent bid prices. The presence of ~~bidders willing to pay prices higher than are supported by our evaluation criteria could further limit our ability to acquire natural gas and oil leases~~water. InBased ~~addition,~~on ~~low~~a orreport ~~uncertain prices for properties can cause potential sellers to withhold or withdraw properties~~ from ~~the~~Netherland, ~~market.~~Sewell & ~~In this environment~~Associates, Inc. weas ~~cannot guarantee that there will be a sufficient number~~ of ~~suitable natural gas and oil leases available for acquisition; that we can sell interests in natural gas and oil leases; or that we can obtain financing for~~December 31, ~~or locate participants to join in the development of prospects. Furthermore~~2016, ~~competitive~~estimated ~~conditions~~proved ~~may~~reserves befor ~~substantially affected by various forms of energy legislation and/or regulation considered from time to time by~~ the ~~government~~wells ~~of the United States and the states~~ in ~~which our properties are located. It is not possible to~~ ~~predict~~ the ~~nature~~Sun ofDog ~~any~~sub-area ~~such~~were ~~legislation~~12.9 orBcf ~~regulation~~gross ~~that~~(7.4 ~~may~~net) ~~ultimately be adopted or its effects upon our future operations~~Bcf. ~~Such~~We ~~laws~~currently ~~and~~own ~~regulations~~a ~~may~~working ~~substantially~~interest ~~increase the costs~~ of ~~exploring for,~~ ~~developing~~approximately or69% ~~producing~~in ~~oil~~the ~~and~~wells ~~natural~~drilled ~~gas~~in ~~and may prevent or delay~~ the ~~commencement~~Sun orDog ~~continuation~~Participating ~~of a given operation~~Area.

~~Regulations~~Catalina ~~and~~Unit ~~Environmental Matters~~

~~General. Our~~The Catalina ~~operations~~Unit ~~are~~is ~~subject~~operated toby aEscalera ~~wide~~Resources, ~~variety~~Inc., ofand ~~stringent~~consists ~~federal,~~of ~~state~~71 ~~and~~wells. ~~local~~The ~~laws~~net ~~and~~average ~~regulations~~gas ~~governing~~production for the ~~exploration~~ ~~and production~~three ofmonths ~~oil~~ended ~~and~~December 31 ~~natural gas~~2016, ~~including~~averaged ~~discharge~~approximately 912 Mcf/d of ~~materials~~natural ~~into~~gas. ~~the~~Warren ~~environment~~currently orowns ~~otherwise~~a ~~relating~~working interest toof ~~environmental~~approximately ~~protection~~13.4% ~~Our~~in ~~operations~~the ~~are~~Participating ~~subject~~Area to“A” in the ~~same~~Catalina ~~environmental~~Unit. ~~laws and~~Based ~~regulations~~on asa ~~other~~report ~~companies~~from inNetherland, ~~the~~Sewell & ~~oil~~Associates, Inc. ~~and~~as ~~gas~~of ~~exploration~~December 31, ~~and~~2016, ~~production~~there ~~industry~~were inno ~~the~~estimated ~~areas~~proved ~~where~~reserves wefor ~~operate.~~the wells ~~These~~in ~~laws~~the ~~and~~Catalina ~~regulations:~~unit.

23Oil and Natural Gas Reserves

~~Table~~Third ofParty ~~Contents~~Reserve Reporting and Controls Over Reserve Report

~~These laws,~~The ~~rules~~reserves ~~and~~estimates ~~regulations~~shown ~~may~~herein ~~also~~for ~~restrict~~ the ~~rate~~years ofended ~~oil~~December 31, 2016 and ~~natural~~2015, ~~gas~~have ~~production~~been ~~below~~independently ~~the~~evaluated ~~rate~~by ~~that~~Netherland, Sewell & ~~would~~Associates, Inc. ~~otherwise~~(“NSAI”), bea ~~possible.~~worldwide ~~The~~leader ~~regulatory~~of ~~burden~~petroleum onproperty ~~the~~analysis ~~oil~~for ~~and gas~~ industry ~~increases~~and ~~the~~financial ~~cost~~organizations ofand ~~doing~~government ~~business~~agencies. inNSAI’s ~~the~~Letter ~~industry~~is ~~and~~filed ~~consequently~~as ~~affects~~an ~~profitability.~~exhibit ~~These~~to ~~regulations~~this ~~have~~Form 10-K. ~~been~~NSAI ~~changed~~was ~~frequently~~founded in ~~the~~1961 ~~past~~ and, inperforms ~~general,~~consulting ~~these~~petroleum ~~changes~~engineering ~~have imposed~~services ~~more~~under ~~stringent~~Texas ~~requirements~~Board ~~that~~of ~~increase~~Professional ~~operating~~Engineers ~~costs~~Registration ~~and/or~~No. F-2699. Within ~~require~~NSAI, ~~capital~~the ~~expenditures~~technical topersons ~~remain~~primarily inresponsible ~~compliance.~~for ~~Failure~~preparing tothe ~~comply~~estimates ~~with~~set ~~these~~forth ~~requirements~~in ~~can~~the ~~result~~NSAI inreserve ~~civil~~report ~~and/or criminal~~incorporated ~~penalties~~herein ~~and~~are ~~liability~~Mr. C. ~~for~~Ashley ~~non-compliance,~~Smith ~~clean-up~~and ~~costs~~Mr. Shane ~~and~~M. ~~other~~Howell. ~~environmental~~Mr. Smith ~~damages,~~has ~~and~~been ~~injunctive~~practicing ~~relief~~consulting petroleum ~~requiring~~engineering usat toNSAI ~~cease~~since ~~production~~2006. ItMr. Smith ~~also~~ is ~~possible~~a ~~that~~Licensed ~~unanticipated developments~~Professional orEngineer ~~changes~~ in the ~~law~~State ~~could~~of ~~require~~Texas us(No. 100560) toand ~~make~~has ~~environmental~~over ~~expenditures~~16 years ~~significantly~~of ~~greater~~practical ~~than~~experience ~~those~~in wepetroleum ~~currently~~engineering, ~~expect.~~with ~~We believe~~over ~~that~~10 years weof ~~substantially~~experience in ~~comply~~the ~~with~~estimation ~~all~~and ~~current~~evaluation ~~applicable~~of ~~environmental~~reserves. ~~laws~~Mr. Howell ~~and~~is ~~regulations,~~a ~~and~~Licensed ~~that~~Professional ~~our~~Geoscientist ~~continued~~in ~~compliance~~the ~~with~~State ~~existing~~of ~~requirements~~Texas, ~~will~~Geology ~~not~~(No. 11276) ~~have~~and ahas ~~material~~over ~~adverse impact~~18 years onof ~~our~~practical ~~financial~~experience ~~condition~~in orpetroleum ~~results~~geosciences, ofwith ~~operations.~~over 11 years ~~However,~~of weexperience ~~cannot~~in ~~predict~~ the ~~passage~~estimation and evaluation of orreserves. ~~quantify~~These ~~the~~NSAI ~~potential~~reserve ~~impact~~estimates ofare ~~more~~reviewed ~~stringent~~by ~~future~~our ~~laws~~in-house petroleum engineers and ~~regulations~~geoscientists atwho ~~this~~oversee ~~time.~~and ~~For~~control preparation of the ~~year~~reserve ~~ended~~report ~~December 31,~~data ~~2015,~~by weworking ~~did~~with ~~not~~NSAI ~~incur~~to ~~any~~ensure ~~material~~the ~~expenditures~~integrity, ~~for~~accuracy ~~remediation~~and ortimeliness ~~pollution~~of ~~control~~data ~~equipment~~furnished atto ~~any~~NSAI offor ~~our~~their ~~facilities~~evaluation process. Warren’s

~~The environmental~~14 ~~laws and regulations which could have a material impact on the oil and natural gas exploration and production industry are as follows:~~

NationalTable Environmental Policy Act. Oil and natural gas exploration and production activities on federal lands are subject to the National Environmental Policy Act ("NEPA"). NEPA requires federal agencies, including the Department of Interior, to evaluate major agency actions having the potential to significantly impact the environment. In the course of such evaluations, an agency will have an EA prepared that assesses the potential direct, indirect and cumulative impacts of a proposed project. If impacts are considered significant, the agency will prepare a more detailed EIS that may be made available for public review and comment. All of our current and proposed exploration, production and development plans on federal lands require governmental permits that are subject to the requirements of NEPA. This process has the potential to delay the development of oil and natural gas projects. Authorizations under NEPA also are subject to protest, appeal or litigation, which can delay or halt projects. Contents

Some ofIndex our exploration and production activities occur on federal leases. This is particularly true of our CBM operations. Exploration and production operations on federal leases are generally performed in accordance with a record of decision issued by the Bureau of Land Management ("BLM") after preparation of an EA or EIS. A record of decision typically includes environmental and land use provisions that restrict and limit exploration and production activities on federal leases. Much of our CBM operations are subject to recordsFinancial of decision, and we have not experienced any material difficulty in complying with their terms and conditions. Statements

~~Waste~~ technical ~~Handling. The~~person ~~Resource~~who ~~Conservation~~was ~~and~~primarily ~~Recovery~~responsible ~~Act~~for ~~("RCRA"),~~overseeing ~~and~~the ~~comparable~~preparation ~~state~~of ~~statutes~~our ~~affect~~reserve ~~oil~~estimates ~~and~~was ~~gas exploration~~its ~~and~~Vice ~~production activities~~President ~~by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup~~ of ~~"hazardous~~Operations. ~~wastes"~~He ~~and~~has onover ~~the~~38 years ~~disposal~~ of ~~non-hazardous~~experience ~~wastes.~~in ~~Under~~ the ~~auspices~~oil ofand ~~the~~gas ~~Environmental Protection Agency~~industry, orincluding ~~EPA,~~30 years ~~the~~as ~~individual~~either ~~states~~a ~~administer~~reserve ~~some~~evaluator or ~~all~~manager. ofHis ~~the~~professional ~~provisions~~qualifications ofinclude ~~RCRA,~~a ~~sometimes~~bachelor’s degree in ~~conjunction~~Petroleum ~~with~~Engineering ~~their~~from ~~own~~Texas ~~more~~A&M ~~stringent~~University ~~requirements. Drilling fluids, produced waters~~ and ~~most~~membership ofin the ~~other~~Society ~~wastes associated with the exploration, development and production~~ of ~~crude oil, natural gas or geothermal energy constitute "solid wastes", which are~~Petroleum ~~regulated~~Engineers. ~~under the less stringent non-hazardous waste~~

24The reserves information in this Annual Report on Form 10-K represents only estimates. There are a number of uncertainties inherent in estimating quantities of proved reserves, including many factors beyond our control, such as commodity pricing. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates of different engineers may vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may lead to revising the original estimate either negatively or positively. Accordingly, initial reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered. The meaningfulness of such estimates depends primarily on the accuracy of the assumptions upon which they were based. Except to the extent that we successfully develop our inventory of probable and possible locations, have positive revisions, acquire additional properties containing proved reserves or conduct successful exploration and development activities or both, our proved reserves will decline as reserves are produced. For additional information regarding estimates of proved reserves, the preparation of such estimates by NSAI and other information about our oil and natural gas reserves, see Note L Oil and Gas Reserve Data (Unaudited) to the Consolidated Financial Statements in Item 8.

~~Table~~The current SEC rules require that the reserve estimates are based on the 12-month unweighted arithmetic average of ~~Contents~~the first-day-of- the-month price for each month in the period January through December 2016. For oil volumes, the average West Texas Intermediate posted price of $39.25 per barrel is adjusted for quality, transportation fees, and market differentials. For gas volumes, the average Henry Hub spot price of $2.48 per MMbtu is adjusted for energy content, transportation fees, and market differentials. All prices are held constant throughout the lives of the properties. For the proved reserves, the average adjusted product prices weighted by production over the remaining lives of the properties are $33.39 per barrel of oil and $1.59 per Mcf of gas. By area, these average adjusted prices are $33.39 per barrel of oil for the California business unit, $1.42 per Mcf of gas for the Pennsylvania business unit and $2.12 per Mcf of gas for the Wyoming business unit. All prices and costs associated with operating wells were held constant in accordance with the SEC guidelines.

~~provisions, but~~The ~~there~~commodity isprice noassumptions ~~guarantee~~described ~~that~~above ~~the~~exceed ~~EPA or~~ the ~~individual~~current ~~states~~market ~~will~~price ~~not adopt more stringent requirements for the handling~~ of ~~non-hazardous~~oil ~~wastes~~and ~~or categorize some non- hazardous wastes as hazardous for future regulation~~gas. ~~Legislation~~Therefore ~~has~~we ~~been~~may ~~proposed~~have ~~from~~a ~~time~~substantial downward toadjustment ~~time~~ in ~~Congress~~our toestimated ~~re-categorize~~proved ~~certain~~reserves ~~oil~~in ~~and~~the ~~gas~~future ~~exploration~~if ~~and~~the ~~production~~current ~~wastes~~low ascommodity ~~"hazardous~~price ~~wastes"~~environment persists.

WeEstimated ~~believe~~Proved weReserves are in substantial compliance with the requirements of RCRA and related state and local laws and regulations, and that we hold all necessary and up-to-date permits, registrations and other authorizations to the extent our operations require them under such laws and regulations. Although we believe the current costs of managing our wastes as they are presently classified are reflected in our budget, any legislative or regulatory reclassification of oil and natural gas exploration and production wastes could increase our costs of managing and disposing of such wastes.

~~Comprehensive~~The ~~Environmental~~following ~~Response,~~table ~~Compensation~~presents ~~and~~our ~~Liability~~estimated ~~Act. The~~proved ~~Comprehensive~~natural ~~Environmental~~gas ~~Response, Compensation~~ and ~~Liability~~ ~~Act ("CERCLA"),~~oil ~~also~~reserves ~~known as the "superfund" law, imposes joint~~ and ~~several liabilities, without regard to fault or legality of conduct, on classes of persons who are considered to be responsible for~~ the ~~release~~PV-10 value of aour ~~"hazardous~~interests ~~substance"~~in ~~into~~net ~~the~~reserves ~~environment.~~in ~~These~~producing ~~persons~~properties ~~include~~as ~~the owner or operator~~ of ~~the disposal site~~December 31, or2016 ~~site where the release occurred,~~ and ~~companies~~2015 ~~that~~based ~~disposed~~upon orreserve ~~arranged for~~reports ~~the~~prepared ~~disposal~~by ~~of the hazardous substance~~NSAI. ~~Under~~The ~~CERCLA,~~PV-10 ~~such persons may be subject to joint and several liabilities for the costs of cleaning up the hazardous substances that have been released~~values ~~into~~shown ~~the~~in ~~environment, for damages to natural resources and for~~ the ~~costs~~table ofare ~~certain health studies. In addition, it is~~ not ~~uncommon~~intended ~~for neighboring landowners and other third parties~~ to ~~file~~represent ~~claims for personal injury and property damage allegedly caused by~~ the ~~hazardous~~current ~~substances~~market ~~released~~value ~~into~~of the ~~environment.~~estimated ~~Although~~natural ~~petroleum~~gas isand ~~excluded~~oil ~~from~~reserves ~~CERCLA's definition of "hazardous substance", in the course of our operations,~~ we ~~use materials that, if released, would be subject to CERCLA~~own. ~~Therefore, governmental agencies or third parties may seek to hold us responsible under CERCLA for all or part of the costs to clean up sites at which such "hazardous substances" have been deposited.~~

Water Discharges. The Federal Water Pollution Control Act, also known as the Clean Water Act, and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants, including produced waters and other oil and gas wastes, into waters of the United States. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or the applicable state agency. These restrictions also prohibit the discharge of dredge and fill material in regulated waters, including wetlands, unless authorized by a permit issued by the U.S. Army Corps of Engineers. Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the federal Clean Water Act and analogous state laws and regulations. Response costs could be high and may have a material adverse effect on our operations. We may not be fully insured for these costs. We maintain all required discharge permits necessary to conduct our operations, and we believe we substantially comply with the terms thereof. Obtaining permits has the potential to delay the development of oil and natural gas projects. We anticipate that total maximum daily load water quality standards established under Clean Water Act delegated programs may be promulgated for surface water bodies in areas where we operate. However, we do not expect that any total maximum daily load regulations, or standards promulgated in any area where we operate, will result in a material increase in our produced water disposal costs because we already inject much of our produced water in disposal wells, rather than discharging into surface water bodies, and would be able to cost-effectively drill and operate additional disposal wells as needed.


	Successor		Predecessor
	Year ended December 31, 2016		Year ended December 31, 2015
Estimated Proved Oil and Natural Gas Reserves:
Net oil reserves (MBbls):
Proved developed		4,008		6,824
Proved undeveloped		724		6,115

Total		4,732		12,939

Net natural gas reserves (MMcf):
Proved developed		114,719		153,093
Proved undeveloped		9,097		10,638

Total		123,816		163,731

Total Net Proved Oil and Natural Gas Reserves (MBoe)		25,368		40,227

~~Air~~15 Emissions. The Federal Clean Air Act and associated state laws and regulations regulate emissions of various air pollutants through the issuance of permits and the imposition of other requirements. In addition, the EPA has developed, and continues to develop, stringent regulations governing emissions of toxic air pollutants at specified sources. Some of our new facilities will be

25Table of Contents

TableIndex ofto ContentsFinancial Statements

required to obtain permits before work can begin, and existing facilities may be required to incur capital costs in order to remain in compliance. Major sources of air pollutants are subject to more stringent, federally based permitting requirements. On April 17, 2012, the EPA issued a final rule that established new source performance standards for volatile organic compounds ("VOCs") and sulfur dioxide, an air toxics standard for major sources of oil and natural gas production, and an air toxics standard for major sources of natural gas transmission and storage. These regulations apply to natural gas wells that are hydraulically fractured, or refractured, and to storage tanks and other equipment. Since January 1, 2015, all wells subject to the rule have been required to use "green completion" technology to limit emissions during well completion operations.


	Successor		Predecessor
	Year ended December 31, 2016		Year ended December 31, 2015
Estimated Present Value of Net Proved Reserves:
PV-10 Value (in thousands)
Proved developed	$	21,497	$	85,147
Proved undeveloped		6,858		10,876

Total(1)		28,355		96,023
Less: future income taxes, discounted at 10%		—		—

Standardized measure of discounted future net cash flows (in thousands)(2)	$	28,355	$	96,023

Prices Used in Calculating Reserves:
Oil (per Bbl)	$	33.39	$	42.81
Natural Gas (per Mcf)	$	1. 59	$	1.74
Proved Developed Reserves (MBoe)		23,127		32,339

~~Because of~~(1) ~~the~~The ~~severity~~PV-10 ofValue ~~ozone~~represents ~~levels in portions of California,~~ the ~~state~~future ~~has~~net ~~the~~cash ~~most~~flows ~~severe~~attributable ~~restrictions~~to onour ~~emissions~~proved ofoil ~~VOCs~~ and ~~nitrogen~~gas ~~oxides~~reserves ~~("NOX")~~before ofincome ~~any state. Producing wells~~tax, ~~natural~~discounted ~~gas~~at ~~plants~~10% ~~and~~per ~~electric generating facilities all generate VOCs and NOX~~annum. ~~Some~~Although ofit ~~our~~is ~~producing~~a ~~wells~~non-GAAP ~~are~~measure, inwe ~~counties~~believe that ~~are~~the ~~designated~~presentation asof ~~non~~the PV-~~attainment~~10 ~~for~~Value ~~ozone~~is relevant and, ~~therefore, potentially~~useful ~~are subject~~ to ~~restrictive~~our ~~emission~~investors ~~limitations~~because ~~and~~it ~~permitting~~presents ~~requirements.~~the ~~California~~discounted ~~also~~future ~~operates~~net acash ~~stringent~~flows ~~program~~attributable to ~~control~~our ~~hazardous~~proved ~~(toxic)~~reserves ~~air~~prior ~~pollutants,~~to ~~and~~taking ~~this~~into ~~program could~~account ~~require~~future ~~the~~corporate ~~installation~~income oftaxes ~~additional~~and ~~controls.~~our ~~Administrative~~current ~~enforcement~~tax ~~actions~~structure. ~~for~~We ~~failure~~use tothis ~~comply~~measure ~~strictly~~when ~~with~~assessing ~~air~~the ~~pollution~~potential ~~regulations~~return oron ~~permits~~investment ~~generally~~related ~~are~~to ~~resolved~~our byoil ~~payment of monetary fines~~ and ~~correction~~gas ~~of any identified deficiencies~~properties. ~~Alternatively,~~Our ~~regulatory~~reconciliation ~~agencies could require us to forego construction, modification or operation~~ of ~~certain~~this ~~air~~non-~~emission~~GAAP ~~sources.~~financial ~~Air emissions~~measure ~~from~~is ~~oil~~shown ~~and~~in ~~natural~~the ~~gas~~table ~~operations~~as ~~also~~the ~~are~~PV-10, ~~regulated~~less byfuture ~~oil~~income ~~and~~taxes, ~~natural~~discounted ~~gas~~at ~~permitting~~10% ~~agencies~~per annum, ~~including~~resulting in ~~California,~~ the ~~South~~standardized ~~Coast~~measure ~~Air~~of ~~Quality~~discounted ~~Management~~future ~~District,~~net ~~the~~cash ~~California Air~~flows. ~~Resources~~The ~~Board~~standardized ~~and~~measure ~~other~~of ~~local~~discounted ~~agencies.~~future ~~These~~net ~~regulations~~cash ~~may~~flows ~~increase~~represents the ~~costs~~present value of ~~compliance~~future ~~for~~cash ~~some~~flows ~~facilities~~attributable weto ~~own~~our orproved ~~operate,~~oil and ~~federal~~natural ~~and~~gas ~~state~~reserves ~~regulatory~~after ~~agencies~~income ~~can impose administrative~~tax, ~~civil~~discounted ~~and~~at ~~criminal~~10%. ~~penalties~~In ~~for~~accordance ~~non-compliance~~ with ~~air~~SEC ~~permits~~requirements, orour ~~other~~reserves ~~requirements~~and of the ~~Federal~~future ~~Clean~~net ~~Air~~revenues ~~Act~~at ~~and~~December ~~associated~~31, ~~state~~2015 ~~laws~~ and ~~regulations. We believe we are in substantial compliance with all air emissions regulations~~2016, ~~and~~were ~~that~~determined weusing ~~hold~~average ~~all~~monthly ~~necessary~~pricing ~~and~~for ~~valid~~2015 ~~construction~~ and ~~operating permits for our operations~~2016. ~~Obtaining~~These ~~permits~~prices ~~has~~reflect ~~the~~adjustment ~~potential~~by tolease ~~delay~~for ~~the~~quality, ~~development~~transportation offees ~~our oil~~ and ~~natural~~regional ~~gas projects.~~price ~~See "Future Regulation—Wilmington Field" below~~differences.

~~The Safe Drinking Water Act, Groundwater Protection, and the Underground Injection Control Program. The Federal Safe Drinking Water Act~~ (~~"SDWA"~~2) ~~and the~~Standardized ~~Underground~~measure ~~Injection Control ("UIC") program promulgated under the SDWA and state programs regulate the drilling and operation~~ of ~~salt~~discounted ~~water~~future ~~disposal~~net ~~wells.~~cash ~~The~~flows ~~EPA~~may ~~directly~~differ ~~administers~~from ~~the~~PV-10 ~~UIC program~~value inbecause ~~some states and in others~~ it isincludes ~~delegated to~~ the ~~state~~effect for administering. Permits must be obtained before drilling salt water disposal wells, and casing integrity monitoring must be conducted periodically to ensure the casing is not leaking saltwater to groundwater. Contamination of ~~groundwater~~future byincome ~~oil and natural gas drilling, production and related operations may result in fines, penalties and remediation costs, among other sanctions and liabilities under the SDWA and state laws~~taxes. ~~In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages and bodily injury.~~

~~We engage~~The ~~third~~data ~~parties to occasionally provide hydraulic fracturing or other well stimulation services to us~~ in ~~connection with many of~~ the ~~wells~~above ~~for~~natural ~~which~~gas weand ~~are~~oil ~~the~~reserves ~~operator.~~table ~~With~~represents ~~the exception~~estimates ~~of hydraulic fracturing using diesel fuel, the SDWA exempt hydraulic fracturing from regulation under the UIC program~~only. OnOil ~~February 12,~~and ~~2014,~~natural ~~the~~gas ~~EPA~~reserve ~~released~~engineering anis ~~"interpretative~~inherently a ~~memorandum"~~subjective ~~providing~~process ~~technical~~of ~~recommendations~~estimating ~~for~~underground ~~implementing~~accumulations ~~UIC~~of ~~requirements~~oil ~~for~~and ~~hydraulic~~natural ~~fracturing~~gas ~~activities using diesel fuels. In this guidance document, EPA expansively defined the term "diesel" to include hydrocarbons such as kerosene~~ that ~~have~~cannot ~~not typically been considered to~~ be ~~diesel~~measured exactly. ~~Bills~~The ~~which~~accuracy ~~would have repealed the hydraulic fracturing exemption have been introduced in the last three sessions~~ of ~~Congress.~~any Inreserve ~~addition,~~estimate ~~the EPA~~ is ~~conducting~~ a ~~congressionally-mandated~~function ~~study~~of on the ~~effects~~quality of ~~hydraulic~~available ~~fracturing~~data onand ~~drinking~~engineering ~~water~~and ~~resources.~~geological ~~The~~interpretation ~~EPA~~and judgment. ~~issued~~Accordingly, areserve ~~final~~estimates ~~draft report~~may invary ~~June~~from ~~2015~~the ~~for~~quantities ~~peer~~of ~~review~~oil and ~~public~~natural ~~comment.~~gas ~~The~~that ~~EPA~~are ~~study,~~ultimately orrecovered. ~~other studies, of hydraulic fracturing could spur~~

26PV-10 is equal to the future net cash flows from our proved reserves, excluding any future income taxes, discounted at 10% per annum (“PV-10”). Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells drilled to known reservoirs for which the existence and recoverability of such reserves can be estimated with reasonable certainty or from existing wells on which a relatively major expenditure is required to establish production. PV-10 may be considered a non-GAAP financial measure as defined by Item 10(e) of Regulation S-K and is derived from the standardized measure of discounted future net cash flows which is the most directly comparable GAAP financial measure. PV-10 is a computation of the standardized measure of discounted future net cash flows on a pre-tax basis. We believe that the presentation of the PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account future corporate income taxes and it is a useful measure for evaluating the relative monetary significance of our oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. However, PV-10 is not a substitute for the standardized measure of discounted future net cash flows.

~~Table~~Oil and gas prices significantly impact the calculation of ~~Contents~~the PV-10 and the standardized measure of discounted future net cash flows. The present value of future net cash flows does not purport to be an estimate of the fair market value of the Company’s proved reserves. An estimate of fair value would also take into account, among other things, anticipated changes in future prices and costs, the expected recovery of reserves in excess of proved reserves and a discount factor more representative of the time value of money and the risks inherent in producing oil and gas. Future prices received for production and costs may vary, perhaps significantly, from the prices and costs assumed for purposes of these estimates. The 10% discount factor used to calculate present value, which is required by Financial Accounting Standard Board pronouncements, may not necessarily be the most appropriate discount rate. The present value, no matter what discount rate is used, is materially affected by assumptions as to timing of future production, which may prove to be inaccurate.

~~initiatives to~~16 further regulate hydraulic fracturing under the SDWA or other regulatory programs. In addition to federal regulation, certain states have adopted and are considering laws that require the disclosure of the chemical constituents in hydraulic fracturing fluids. Moreover, the Department of the Interior issued rules in March 2015 that modify regulations for hydraulic fracturing activities on federal and Indian lands, including chemical disclosure, well bore integrity and handling of flow back water. Additional disclosure and operational requirements could result in increased regulation, operational delays and increased operating costs that could make it more difficult to perform hydraulic fracturing.

CaliforniaTable Environmental Quality Act ("CEQA"). CEQA is a California statute that requires consideration of the environmental impacts of proposed actions that may affect the environment. CEQA often requires the responsible governmental agency to prepare an environmental impact analysis document that is made available for public comment. In some cases, the responsible agency also is required to consider mitigation measures. The party requesting agency action bears the expense of the document. Contents

In 2014,Index after a lengthy CEQA analysis, we received permit approvals from the South Coast Air Quality Management District ("SCAQMD") for the disposal of our WTU associated and produced gas. These permits allow us (i) to burnFinancial gas using a new high efficiency clean enclosed burner to replace the existing gas flare, and (ii) eventually, to sell the gas directly to a third party user by transporting the gas through transmission facilities owned by local gas utility companies. In the future, we may be required to undergo the CEQA process for other proposed actions by state and local governmental authorities that meet specified criteria. At a minimum, the CEQA process delays and adds expense to the process of obtaining new permits and permit renewals. See "Future Regulation—Wilmington Field" below. Statements

~~Abandonment,~~There ~~Decommissioning~~are ~~and~~numerous ~~Remediation~~uncertainties ~~Requirements. Federal,~~in ~~state~~estimating ~~and~~quantities ~~local~~of ~~regulations~~proved ~~provide~~reserves ~~detailed~~and ~~requirements~~in projecting ~~for~~future rates of production and the ~~abandonment~~timing of development expenditures, including many factors beyond our control. The reserve data set forth in this annual report on Form 10-K, are only estimates. ~~wells~~Although we believe these estimates to be reasonable, ~~closure~~reserve orestimates ~~decommissioning~~are imprecise and may be expected to change as additional information becomes available. Estimates of ~~production~~natural gas and ~~transportation~~oil ~~facilities~~reserves, of necessity, are projections based on engineering data and there are uncertainties inherent in the ~~environmental~~interpretation ~~restoration~~of this data, as well as the projection of ~~operations~~future ~~sites~~rates of production and the timing of development expenditures. ~~The~~Reservoir ~~California~~engineering ~~Department~~is a subjective process of ~~Conservation~~estimating underground accumulations of natural gas and oil that cannot be exactly measured. Therefore, ~~Division~~estimates of ~~Oil~~the economically recoverable quantities of natural gas and oil attributable to any particular group of properties, ~~Gas~~classifications of the reserves based on risk of recovery and ~~Geothermal~~the ~~Resources~~estimates ~~("DOGGR")~~are isa function of the ~~principal~~quality ~~state~~of ~~agency~~available ~~responsible~~data ~~for~~and ~~regulating~~of engineering and geological interpretation and judgment and the ~~drilling~~future net cash flows expected there from, ~~operation~~prepared by different engineers or by the same engineers at different times, ~~maintenance~~may vary substantially. There also can be no assurance that the reserves set forth herein will ultimately be produced or that the proved undeveloped reserves will be developed within the periods anticipated. Actual production, revenues and ~~abandonment~~expenditures ofwith ~~all~~respect ~~oil~~to our reserves will likely vary from estimates, and ~~natural~~such ~~gas~~variances ~~wells~~may inbe material. In addition, the ~~state~~estimates of future net revenues from our proved reserves and the present value thereof ~~California~~are based upon certain assumptions about future production levels, prices and costs that may not be correct.

~~Significant potential~~With ~~costs~~respect ~~relating~~ to ~~environmental~~the estimates ~~and~~prepared ~~land-use~~by ~~regulations~~NSAI, ~~associated~~PV-10 ~~with~~value ~~our~~should ~~existing~~not ~~properties~~be ~~and~~construed ~~operations~~as ~~include~~representative ~~those~~of ~~relating~~the tofair ~~(i) plugging~~market ~~and abandonment~~value of ~~facilities,~~our ~~(ii) clean-up~~proved ~~costs~~natural gas and ~~damages~~oil ~~due~~properties tosince ~~spills~~discounted orfuture ~~other~~net ~~releases,~~cash ~~and~~flows ~~(iii) penalties~~are ~~imposed~~based upon projected cash flows which do not provide for ~~spills,~~changes ~~releases~~in natural gas and oil prices or ~~non-compliance~~for ~~with~~the ~~applicable~~escalation ~~laws~~of expenses and ~~regulations~~ capital costs. AsThe meaningfulness of such estimates is ~~customary~~highly independent upon the ~~oil~~accuracy ~~and~~of ~~natural~~the ~~gas~~assumptions ~~industry,~~upon wewhich ~~typically~~they are ~~have~~based. ~~contractually~~Actual ~~assumed,~~future prices and costs may ~~assume~~differ inmaterially ~~the~~from ~~future,~~those ~~certain~~estimated. ~~obligations~~You ~~relating~~are cautioned not to ~~plugging~~place ~~and~~undue ~~abandonment, clean-up~~reliance ~~and~~on ~~other~~the ~~environmental~~reserve ~~costs~~data included in ~~connection~~this ~~with~~annual ~~our~~report ~~acquisition~~on ofForm 10-K. ~~operating~~Under SEC ~~interests~~guidelines, prices used in ~~oil~~computing ~~and~~reserves ~~gas~~at ~~fields~~December 31, 2016 and ~~these~~2015, ~~costs~~are ~~can~~based beon ~~significant~~12 month average pricing for 2016 and 2015, respectively.

~~Climate~~Productive ~~Change~~Wells Legislation and Greenhouse Gas Regulations. Recent and future environmental regulations, including additional federal and state restrictions on greenhouse gas ("GHG") emissions that have been or may be passed in response to climate change concerns, may increase our operating costs and also reduce the demand for the oil and natural gas we produce.

~~Studies over~~The ~~recent~~following ~~years have indicated that emissions of certain gases may be contributing to warming of the Earth's atmosphere. In response to these studies, many nations have agreed~~table tosets ~~limit~~forth ~~emissions~~our ofgross ~~GHG pursuant to the United Nations Framework Convention on Climate Change,~~ and ~~the~~net ~~"Kyoto~~productive ~~Protocol."~~wells ~~Methane,~~as ~~a primary component~~ of ~~natural gas~~December 31, ~~and~~2016 ~~carbon~~(Successor): dioxide, a byproduct of the burning of oil, natural gas and refined petroleum products, are considered "greenhouse gases" regulated by the Kyoto Protocol. Although the United States is not participating in the Kyoto Protocol, the United States Supreme Court has ruled, in Massachusetts, et al. v. EPA, that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decision and the change in presidential administrations, on


	Oil Wells				Natural Gas Wells				Total
	Gross		Net		Gross		Net		Gross		Net
California		232		230		—		—		232		230
New Mexico		—		—		6		1.5		6		1.5
Pennsylvania		—		—		34		24.9		34		24.9
Texas		—		—		10		2.6		10		2.6
Wyoming		—		—		386		248.7		386		248.7

Total		232		230		436		277.7		668		507.7

~~Table~~Gross wells represent all wells in which we have a working interest. Net wells represent the total of ~~Contents~~our fractional undivided working interest in those wells. Productive wells include producing wells and wells mechanically capable of production. Not all wells listed above were on production as of December 31, 2016.

~~December 7, 2009,~~There ~~the~~were ~~EPA~~no ~~issued~~development ~~a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations~~ and ~~emissions limits~~exploration ~~under~~activities the Clean Air Act, even without Congressional action. As part of this array of new regulations, on September 22, 2009, the EPA also issued a GHG monitoring and reporting rule that requires certain parties, including participants in ~~the~~progress ~~oil~~at ~~and~~year ~~natural gas industry, to monitor and report their GHG emissions, including methane and carbon dioxide, to the EPA~~end. ~~On November 30~~Additionally, ~~2010,~~there ~~the~~were ~~EPA~~no ~~published~~proved aundeveloped ~~final~~reserves ~~rule that set forth reporting requirements for the petroleum and natural gas industry. This rule requires companies that hold state~~ with drilling ~~permits and~~activities that emit 25,000 metric tons or more of carbon dioxide equivalent per year to report annual carbon dioxide, methane and nitrous oxide emissions from certain sources beginning on March 31, 2012. These reporting obligations continue in ~~effect~~2016.

~~The EPA~~Natural ~~has~~Gas ~~also issued a notice of finding~~ and ~~determination~~Oil ~~that~~Acreage emissions of carbon dioxide, methane and other GHGs present an endangerment to human health and the environment, which allows the EPA to begin regulating emissions of GHGs under existing provisions of the Clean Air Act. The EPA has begun to implement GHG-related reporting and permitting rules for certain stationary sources. Beginning in 2012, the EPA has issued regulations aimed at reducing greenhouse gas emission, including methanol from oil and gas activities and recently announced plans to issue additional rules which target methane emissions from the oil and gas sector. The EPA's finding, the greenhouse gas reporting rules, and the rules to regulate the emissions of greenhouse gases may affect the outcome of other climate change lawsuits pending in United States federal courts in a manner unfavorable to our industry. Similarly, the U.S. Congress has considered, and may in the future consider, "cap and trade" legislation that would establish an economy-wide cap on emissions of GHGs in the United States and would require most sources of GHG emissions to obtain GHG emission "allowances" corresponding to their annual emissions of GHGs. Future federal climate change legislation could adversely impact our operations.

~~In addition~~The tofollowing ~~the~~table ~~EPA's~~sets ~~actions~~forth to regulate GHGs, more than one-third of the states have begun taking action on their own to control and/or reduce emissions of greenhouse gases. Several multi-state programs have been developed or are in the process of being developed: the Regional Greenhouse Gas Initiative involving 10 Northeastern states and three Canadian provinces, the Western Climate Initiative involving California and four Canadian provinces, and the Midwestern Greenhouse Gas Reduction Accord involving seven states and one Canadian province. Any of the climate change regulatory and legislative initiatives described above could have a material adverse effect on our ~~business,~~acreage ~~financial~~position ~~condition,~~as ~~and results~~ of ~~operations. On September~~December 2731, ~~2006,~~2016 ~~California's governor signed into law Assembly Bill~~ (ABSuccessor): 32, known as the "California Global Warming Solutions Act of 2006," which establishes a statewide cap on GHGs that will reduce the state's GHG emissions to 1990 levels by 2020 and establishes a "cap and trade" program. The California Air Resources Board adopted regulations in December 2010 to implement AB 32 that commenced on January 1, 2012.

Our operations could be adversely impacted by current and future state and local climate change initiatives.


	Developed				Undeveloped				Total
	Gross		Net		Gross		Net		Gross		Net
California		1,260		1,249		1,216		1,211		2,476		2,460
New Mexico		3,384		623		761		37		4,145		660
Pennsylvania		3,191		2,591		3,321		2,697		6,512		5,288
Texas		704		176		—		—		704		176
Wyoming		29,467		22,839		60,676		47,171		90,143		70,010
Other		440		138		1,280		1,280		1,720		1,418

Total		38,446		27,616		67,254		52,396		105,700		80,012

~~Threatened~~17 and endangered species, migratory birds, and natural resources. Various state and federal statutes prohibit certain actions that adversely affect endangered or threatened species and their habitat, migratory birds, wetlands and natural resources. These statutes include the Endangered Species Act, the Migratory Bird Treaty Act, the Clean Water Act and CERCLA. The United States Fish and Wildlife Service may designate critical habitat and suitable habitat areas that it believes are necessary for survival of threatened or endangered species. A critical habitat or suitable habitat designation could result in further material restrictions to federal land use and private land use and could delay or prohibit land access or development. Where takings of or harm to species or damages to wetlands, habitat or natural resources occur or may occur, government entities or at times private parties may act to prevent oil and gas exploration activities or seek damages for harm to species, habitat or natural

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~~resources~~The primary terms of the Company’s oil and gas leases expire on various dates in any given ~~resulting~~year. ~~from~~All ~~drilling~~of orthe ~~construction~~Company’s proved acreage is perpetuated by production, unitization or ~~releases~~by ofcontinuous operations. This means that the Company will maintain its rights in these leases as long as natural gas or oil, ~~wastes,~~is ~~hazardous~~produced ~~substances~~in paying quantities or as long as operations are conducted on the acreage by the Company or other ~~regulated~~parties ~~materials~~holding interests in those leases. In some cases, ~~and~~if ~~may~~production ~~seek~~from ~~natural~~a ~~resources~~lease ~~damages~~ceases, the lease will expire, and in ~~some~~other cases, ~~criminal~~if production or royalty payments ~~penalties~~attributable to any lease is interrupted or ceases, the Company may maintain the lease by unit production or conducting operations on the unit or lease.

The Company has approximately 427 and 28,781 and 2,344 net acres subject to leases with primary terms that expire in 2017, 2018 and 2019 respectively. Leases covering 534 net acres expired in 2016. The Company has in the past been and expects in the future to be able to extend the terms of some of these leases by conducting operations thereon or by exchanging or selling some of these leases to or with other companies. The Company does not expect to lose material developed lease acreage as a result of a failure to drill, inadequate capital, equipment, or personnel. The company did not meet the unit requirement to drill 25 gross ~~Hazard~~CBM ~~Communications~~wells on or before September 11, 2016, and ~~Community~~the ~~Right~~Company has approximately 31,887 total net acres subject to ~~Know~~ contraction of the Spyglass Hill Unit. Many of those acres will expire in 2018, as reflected above, unless perpetuated by drilling operations.

WeBased ~~are~~on ~~subject~~the toCompany’s ~~federal~~evaluation ~~and~~of ~~state~~prospective ~~hazard~~economics, ~~communications~~the ~~and~~Company ~~community~~has ~~right~~allowed acreage to ~~know~~expire ~~statutes~~ and ~~regulations.~~will ~~These regulations~~continue ~~govern~~to ~~record~~allow ~~keeping~~additional ~~and~~acreage ~~reporting~~to ofexpire ~~the~~in ~~use and release of hazardous substances, including, but not limited to,~~ the ~~federal Emergency Planning and Community Right-to-Know Act~~future.

~~Occupational~~Production ~~Safety~~Volumes, Sales Prices and ~~Health~~Production ~~Act~~ Costs

WeThe ~~are~~following ~~subject~~table tosummarizes ~~the~~our ~~requirements~~net ofnatural ~~the~~gas ~~federal Occupational Safety~~ and ~~Health~~oil ~~Act~~production volumes, ~~commonly~~our ~~referred~~average tosales asprices ~~OSHA,~~ and ~~comparable state~~expenses ~~statutes~~for ~~that~~the ~~regulate~~periods ~~the~~indicated. Our ~~protection~~production ofis ~~the~~attributable ~~health~~to ~~and~~our ~~safety~~direct ofinterests ~~workers~~in producing properties. InFor ~~addition~~these purposes, ~~the~~our ~~OSHA~~net ~~hazard~~production ~~communication~~will ~~standard~~be ~~requires~~production that ~~information~~is beowned ~~maintained~~by ~~about~~us, ~~hazardous~~after ~~materials used~~deducting orroyalty, ~~produced~~limited inpartner ~~operations~~ and ~~that~~other ~~this~~similar ~~information~~interests. beThe ~~provided~~lease operating expenses shown relates to ~~employees~~our net production. In addition, ~~state~~this ~~and~~table ~~local~~summarizes ~~government~~our ~~authorities~~production ~~and~~for ~~the~~each ~~public.~~field that contains 15% or more of our total proved reserves:

Operating Regulation of the Oil and Gas Industry


	Successor		Predecessor
	Year ended December 31, 2016		Year ended December 31, 2015
Production:
Oil (MBbls)
Wilmington Field		793.8		980.3

Total		793.8		980.3

Natural Gas (MMcf)
Wilmington Field		50.8		—
Marcellus		18,284.2		22,943.3
Atlantic Rim		4,291.5		4,709.8
Other		413.4		380.2

Total		23,039.9		28,033.3

Production:
Total MBoe(1)		4,642.3		5,652.5
Average Sales Price Per Unit:
Oil (per Bbl)	$	34.09	$	41.14
Natural gas (per Mcf)	$	1.31	$	1.55
Weighted average sales price (per Boe)	$	12.35	$	14.81
Expenses (per Boe):
Lease operating expense(2)	$	9.32	$	8.76

In(1) ~~addition~~Natural ~~to environmental laws and regulations, exploration, production and operations in the oil and~~ gas ~~industry~~reserves are ~~extensively regulated~~converted by numerous federal, state and local authorities. Legislation affecting the oil and gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden. Numerous departments and agencies, both federal and state, are authorized by statute to ~~issue rules and regulations binding on the~~ oil ~~and~~reserves ~~gas~~using ~~industry,~~a ~~some~~ratio of ~~which~~six ~~carry~~Mcf ~~substantial penalties for failure~~ to ~~comply.~~one ~~Although~~Bbl ~~the~~of ~~regulatory burden on the~~ oil. ~~and~~This ~~gas~~ratio ~~industry~~does ~~increases~~not ~~our~~assume ~~cost~~price ofequivalency ~~doing business~~ and, ~~consequently,~~given ~~affects~~price ~~our profitability~~differentials, ~~these~~the ~~burdens~~price ~~generally do~~for ~~not~~a ~~affect~~barrel usof ~~any~~oil ~~differently~~equivalent orfor tonatural ~~any~~gas ~~greater~~may ordiffer ~~lesser~~significantly ~~extent~~from ~~than they affect other companies in~~ the ~~industry~~price ~~with~~for ~~similar~~a ~~types,~~barrel ~~quantities and locations~~ of ~~production~~oil.

~~Drilling~~(2) ~~and~~Lease ~~Production. Our~~operating ~~drilling~~expenses ~~and~~related ~~production operations are subject~~ to ~~various~~our ~~types~~CBM ofoperations ~~regulation~~include atcosts ~~federal,~~for ~~state~~operating ~~and local~~our ~~levels.~~commercially ~~These types~~productive ofCBM ~~regulation~~wells, ~~include~~together ~~requiring~~with ~~permits~~the ~~and~~costs ~~bonds~~ for ~~the~~operating ~~drilling~~our ofCBM wells ~~and~~that ~~reports~~are ~~concerning~~still ~~operations.~~in ~~Most~~the ~~states~~dewatering ~~and~~phase ~~some counties~~ and ~~municipalities~~are innot ~~which~~yet wecommercially ~~operate also regulate one or more of the following:~~productive.

~~State laws~~18 regulate the size and shape of drilling and spacing units or proration units and govern the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration, while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibit the venting or flaring of natural gas, and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of natural gas and oil we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction.

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TableIndex ofto ContentsFinancial Statements

~~Natural~~Crude ~~Gas~~Oil ~~Sales Transportation. Historically, federal legislation~~ and regulatory controls have affected the price of the natural gas we produce and the manner in which we market our production. The Federal Energy Regulatory Commission, or FERC, has jurisdiction over the transportation and sale or resale of natural gas in interstate commerce by natural gas companies under the Natural Gas ~~Act~~Marketing of 1938 and the Natural Gas Policy Act of 1978. Since 1978, various federal laws have been enacted that have resulted in the complete removal of all price and non-price controls for sales of domestic natural gas sold in "first sales", which includes all of the sales of our production.

~~FERC also~~We ~~regulates~~sell ~~interstate~~our ~~natural~~oil ~~gas transportation rates~~ and ~~service conditions, which affects the marketing of the~~ natural gas weproduction ~~produce,~~to asvarious ~~well~~purchasers asin the ~~revenues~~areas wewhere ~~receive~~the ~~for sales~~oil ofand ~~our~~ natural gas is produced. ~~Commencing~~Our inrevenues ~~1985,~~are highly ~~FERC~~dependent ~~promulgated~~upon athe ~~series~~prices of ~~orders~~, ~~regulations~~ and ~~rule~~demand ~~makings~~for, ~~that~~oil ~~significantly~~and ~~fostered~~gas. ~~competition~~The inmarkets ~~the~~for ~~business~~oil ~~of transporting~~ and ~~marketing~~ gas. ~~Today,~~have ~~interstate~~historically ~~pipeline~~been ~~companies~~volatile and are ~~required~~likely to ~~provide~~continue ~~nondiscriminatory~~to ~~transportation~~be ~~services~~volatile toin ~~producers,~~the ~~marketers~~future. ~~and~~The ~~other~~prices ~~shippers,~~we ~~regardless~~receive offor ~~whether~~our ~~such~~oil ~~shippers~~and gas production are subject ~~affiliated~~to ~~with~~wide anfluctuations ~~interstate~~and ~~pipeline~~depend ~~company.~~on ~~FERC's~~numerous ~~initiatives~~factors ~~have~~beyond ~~led~~our tocontrol, ~~the~~including ~~development~~location ofand aquality ~~competitive~~differentials, ~~unregulated~~seasonality, ~~open~~economic ~~access~~conditions, ~~market~~foreign ~~for~~imports, ~~gas~~political ~~purchases~~conditions ~~and~~in ~~sales that permits all purchasers~~other ofoil-producing ~~gas~~and ~~to buy~~ gas ~~directly from third~~-~~party~~producing ~~sellers other than pipelines. However~~countries, the ~~natural~~actions ~~gas~~of ~~industry~~OPEC, ~~historically~~and ~~has~~domestic ~~been~~government ~~very heavily regulated. Therefore~~regulation, welegislation ~~cannot~~and ~~guarantee~~policies. ~~that~~Decreases ~~the~~in ~~less~~oil ~~stringent~~and ~~regulatory~~gas ~~approach~~prices ~~recently~~have ~~pursued by FERC~~ had, and ~~Congress~~could ~~will~~have ~~continue~~in ~~indefinitely into~~ the future, ~~nor~~an ~~can~~adverse weeffect ~~determine what~~on ~~effect,~~the ifcarrying ~~any,~~value ~~future~~and ~~regulatory~~volumes ~~changes~~of ~~might~~our ~~have~~proved onreserves and our ~~natural~~revenues, ~~gas~~profitability ~~related~~and ~~activities~~cash flow.

~~Under FERC's~~We ~~current~~use ~~regulatory~~various ~~regime,~~derivative ~~transmission~~instruments ~~services~~to ~~must~~manage beour ~~provided~~exposure onto ancommodity ~~open-access,~~price ~~non-discriminatory~~risk ~~basis~~on atsales ~~cost-based rates or at market-based rates if the transportation market at issue is sufficiently competitive. Gathering services, which occur upstream~~ of ~~jurisdictional~~oil ~~transmission~~and ~~services,~~gas ~~are regulated by state agencies~~production. ~~Although~~Derivatives ~~its policy is~~provide ~~still~~us inprotection ~~flux,~~on ~~FERC~~the ~~recently~~sales ~~has~~revenue ~~reclassified~~streams ~~certain~~if ~~jurisdictional~~prices ~~transmission~~decline ~~facilities~~below asthe ~~non-jurisdictional~~prices ~~gathering~~at ~~facilities,~~ which ~~has~~ the ~~tendency~~derivatives toare ~~increase~~set. ~~our~~Our ~~costs~~derivative ofinstruments ~~transporting gas~~currently toconsist ~~point-~~of~~-sale~~ ~~locations~~swap agreements with financial institutions.

~~Permits. Our~~For ~~operations are subject to various federal~~2016, ~~state~~the ~~and~~largest ~~local~~purchasers ~~laws~~ and ~~regulations~~marketers ~~that include requiring permits for the drilling and operation~~ of ~~wells,~~our ~~maintaining~~total ~~bonding~~oil and ~~insurance~~gas ~~requirements~~production towere ~~drill,~~Phillips ~~operate,~~66 ~~plug and abandon wells~~Company, ~~restoring~~Clearwater ~~the surface associated with our wells; and regulating the location of wells~~Enterprises, ~~the~~and ~~method~~Devlar ~~of drilling and casing wells~~Energy, ~~the surface use and restoration of properties upon~~ which ~~wells~~accounted ~~are~~for ~~drilled~~58%, ~~the~~35% ~~plugging~~ and ~~abandonment of wells~~6%, ~~the disposal of fluids and solids used in connection with our operations~~respectively, ~~and air emissions associated with our operations. Also, we have permits from numerous jurisdictions to operate crude oil, natural gas and related pipelines and equipment within the boundaries~~ of ~~these governmental jurisdictions. The permits required for various aspects of~~ our ~~operations~~total ~~are~~production ~~subject to enforcement for noncompliance, as well as revocation, modification and renewal by issuing authorities~~sold.

All of our oil reserves are located in California and are sold into a transportation pipeline which delivers our oil production to Phillips 66 Company, which operates a refinery in nearby Carson, California. All of our oil production in California is attributable to heavy crude (generally 21 degree API gravity crude oil or lower). The market price for California crude oil differs from the established market indices in the U.S., due principally to the higher transportation and refining costs associated with heavy oil. Effective March 1, 2016, we entered into an oil purchase contract with Phillips 66 Company whereby the Company sells its oil at the average Midway Sunset posted price for the month less $3.05 per barrel plus a premium for a gravity adjustment which ~~Operations~~should onapproximate ~~Federal~~$0.20 ~~Oil~~per ~~and~~barrel. ~~Gas~~For ~~Leases~~ 2016, Warren received a weighted average price of approximately 79% of the NYMEX index price for crude oil sold under the Phillips 66 contract.

WeOur ~~conduct~~natural agas ~~sizeable~~production ~~portion~~in ofPennsylvania ~~our~~and ~~operations~~Wyoming onis ~~federal~~delivered ~~oil~~into ~~and~~ natural gas ~~leases~~pipelines ~~which~~for ~~are~~transportation ~~administered~~and byis ~~the~~sold ~~BLM~~to ~~and the~~various ~~Minerals~~purchasers ~~Management~~for ~~Service~~later ~~("MMS")~~re-marketing or end use. ~~Federal~~The ~~leases~~majority ~~contain~~of ~~relatively~~all ~~standard~~of ~~terms~~our ~~and~~natural ~~require~~gas ~~compliance~~is ~~with~~sold ~~detailed~~under ~~BLM~~monthly ~~and~~contracts ~~MMS~~that ~~regulations~~allow ~~and~~for ~~orders,~~periodic ~~which~~adjustments ~~are~~in ~~subject~~pricing according to ~~change~~market demands. ~~Under~~The prices and ~~certain~~marketing ~~circumstances~~of natural gas and oil can be affected by factors beyond our control, the ~~BLM~~effects ~~may~~of ~~require~~which ~~any~~cannot ofbe predicted, including seasonal variations, general market supply and other fluctuations. In the Marcellus Shale, we sell our ~~operations~~natural ongas ~~federal~~at the ~~leases~~Tennessee toGas bePipeline ~~suspended~~(TGP, ~~curtailed~~Zone 4) or ~~terminated~~the Transco-Leidy Line receipts market price less transportation fees. ~~Any~~Both ~~such~~price ~~suspension~~points orin ~~termination~~the ~~could~~Marcellus and the CIG price typically have a ~~material~~negative ~~adverse~~basis ~~effect~~differential ~~on our~~below ~~business,~~the ~~financial~~NYMEX ~~condition~~Henry ~~and~~Hub prompt ~~results~~month ofnatural ~~operations~~gas price. ~~The~~Fluctuations ~~MMS~~between ~~issued~~spot aand ~~final~~index ~~rule~~prices ~~that~~can ~~amended~~significantly ~~its~~impact ~~regulations~~the ~~governing~~overall differential to the ~~valuation~~Henry ofHub. ~~oil~~In ~~and~~the ~~gas~~Atlantic ~~produced~~Rim ~~from~~of ~~federal~~the ~~leases.~~Washakie ~~This~~Basin, ~~rule~~Wyoming, we sell our natural gas at the Rocky Mountain Colorado ~~which~~Interstate ~~became~~Gas ~~effective~~(“CIG”) ~~June 1,~~market ~~2000,~~price ~~provides~~less transportation fees. We believe that the ~~MMS~~loss ~~will~~of ~~collect~~any ~~royalties~~of ~~based~~these purchasers would not have a material adverse effect on ~~the~~our ~~market~~operations, ~~value~~as ofwe ~~oil~~believe ~~and~~there ~~gas~~are ~~produced~~a ~~from~~significant ~~federal~~number ~~leases~~of readily available purchasers in the market.

30Hedging Activities

~~Table~~We have designed a risk management policy for the use of ~~Contents~~derivative instruments to provide partial protection against certain risks relating to our ongoing business operations, such as commodity price risk. We have an active commodity hedging program to mitigate the risks of the volatile prices of oil and natural gas. In accordance with our term loan, we intend to hedge approximately 75% of our oil and natural gas production on a forward 12 to 24 month basis using a combination of swaps, cashless collars and other financial derivative instruments with counterparties that we believe are creditworthy. Our decision on the quantity and price at which we choose to hedge our production is based in part on our view of current and future market conditions. While there are many different types of derivatives available, we typically use collar agreements and swap agreements to attempt to manage price risk more effectively. The collar agreements are put and call options used to establish floor and ceiling commodity prices for a fixed volume of production during a certain time period. All collar agreements provide for payments to counterparties if the index price exceeds the ceiling and payments from the counterparties if the index price is below the floor. The price swaps call for payments to, or receipts from, counterparties based on whether the market price of oil, natural gas, and natural gas liquids for the period is greater or less than the fixed price established for that period when the swap is put in place. If the index price falls below the floor price, the counterparty pays us net of the fixed premium. If the index price rises above floor price, we pay the fixed premium. Our oil and gas hedges run into 2019.

~~State~~19 ~~Regulation~~

OurTable operations are also subject to regulation at the state, and in some cases, county, municipal and local governmental levels. Such regulation includes requirements concerning permits for the drilling of wells, maintaining bonding requirements in order to drill or operate wells, the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, the plugging and abandonment of wells, and the disposal of fluids used and produced in connection with operations. Our operations are also subject to various conservation laws and regulations pertaining to the size of drilling, spacing and proration units and the unitization or pooling of oil and gas properties. Contents

In California,Index as part of our waterflood development plan for the WTU and NWU, over the next 7 years, we will require 20 to 30Financial water injection well approvals from the California DOGGR. In recent years, the DOGGR has timely reviewed and approved our applications for injection permits. Should DOGGR delay the review process or deny our applications for future water injection wells, our ability to develop the WTU and NWU may be compromised. Statements

~~The Wyoming~~Our ~~Department~~Service of Environmental Quality, or Wyoming DEQ, has restrictive regulations applicable to the surface disposal of water produced from our CBM drilling operations. We typically are required to obtain Clean Water Act, Safe Drinking Water Act and ~~analogous~~Operational ~~state~~Activities and local permits to use surface discharge methods, such as settling ponds, to dispose of water when the groundwater produced from the coal seams will not exceed surface discharge permit limitations. Surface disposal options have volumetric limitations and require an extensive third-party water sampling and laboratory analysis program to ensure compliance with state permit standards. Alternative disposal methods to surface disposal of water are more expensive. These alternatives include installing and operating water treatment facilities or drilling disposal wells to inject the produced water in the underground formations below the coal seams or lower sandstone horizons. Injection wells are regulated by the Wyoming DEQ, the Wyoming Oil & Gas Conservation Commission and the BLM, and permits to drill these wells are obtained from these agencies. Based on our experience with CBM production, we believe that permits for surface discharge of produced water in the Washakie Basin have become and will continue to be difficult to obtain. As a result, in Wyoming, our produced water is currently re-injected into water disposal wells.

~~In the~~Our ~~areas~~drilling, ofcompletion, ~~Pennsylvania where we operate~~production, ~~water~~re-entry ~~sourcing~~ and ~~wastewater~~land ~~disposal~~operations are ~~regulated both by the Pennsylvania Department of Environmental Protection~~conducted, ormanaged ~~PADEP, as well as~~and ~~the Susquehanna~~supervised ~~River~~for ~~Basin~~us ~~Commission,~~through orWarren ~~SRBC~~E&P. ~~The~~Through ~~SRBC~~Warren isE&P, awe ~~federal~~employ ~~interstate~~petroleum ~~watershed~~engineers, ~~agency~~geologists, ~~that~~drilling ~~oversees~~supervisors, ~~the~~landmen ~~withdrawal~~ and ~~use~~field ~~of surface water and groundwater from the Susquehanna River Basin for natural gas development and regulates interbasin transfers of produced fluids~~supervisors. ~~The~~Warren ~~SRBC~~E&P also ~~restricts~~employs ~~water~~geologists, ~~withdrawal~~engineers rates during periods of reduced precipitation to avoid adverse impacts to the water resources within the Susquehanna River Basin. The PADEP implements a statewide program governing all aspects of natural gas development. This program includes a requirement that operators submit a water management plan for DEP approval prior to the issuance of drilling permits. The PADEP imposes extensive operational and ~~design~~other ~~standards~~personnel on ~~impoundments~~a ~~and pits that store freshwater~~contract ~~or produced water associated with natural gas development~~basis. ~~Discharges~~As of ~~produced~~December 31, ~~water to streams in Pennsylvania are prohibited unless strict effluent limits are achieved. The EPA~~2016, ~~rather~~Warren ~~than~~E&P ~~DEP administers~~was the ~~injection~~operator ~~well~~of ~~program~~approximately in87% ~~Pennsylvania. Very few injection wells have been permitted in Pennsylvania to accept produced water from unconventional wells. In December~~ of ~~2013,~~ the ~~PADEP proposed additional regulations governing the permitting and operation of natural gas~~ wells. ~~These~~in ~~regulations, if promulgated as proposed, are likely to increase significantly the costs to dispose of produced water,~~ which ~~could~~we ~~have~~had ~~a material adverse effect on our business, financial condition and results of operations~~interests.

~~In addition,~~Competition ~~state conservation laws, which frequently establish maximum rates of production from oil and gas wells, generally prohibit, restrict or regulate the venting or flaring of gas and impose certain~~

31The oil and natural gas industry is highly competitive and we compete with a substantial number of other companies that have greater financial and other resources. Many of these companies explore for, produce and market oil and natural gas, as well as carry on refining operations and market the resultant products on a worldwide basis. The primary areas in which we encounter substantial competition are in locating and acquiring desirable leasehold acreage for our drilling and development operations, locating and acquiring attractive producing oil and natural gas properties, obtaining sufficient availability of drilling and completion equipment and services, obtaining purchasers and transporters of the oil and natural gas we produce and hiring and retaining key employees. In general, the bidding for natural gas and oil leases has become intense in the areas in which we operate with bidders evaluating potential acquisitions with varying product pricing parameters and other criteria that result in widely divergent bid prices. The presence of bidders willing to pay prices higher than are supported by our evaluation criteria could further limit our ability to acquire natural gas and oil leases. In addition, low or uncertain prices for properties can cause potential sellers to withhold or withdraw properties from the market. In this environment, we cannot guarantee that there will be a sufficient number of suitable natural gas and oil leases available for acquisition; that we can sell interests in natural gas and oil leases; or that we can obtain financing for, or locate participants to join in the development of prospects. Furthermore, competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the government of the United States and the states in which our properties are located. It is not possible to predict the nature of any such legislation or regulation that may ultimately be adopted or its effects upon our future operations. Such laws and regulations may substantially increase the costs of exploring for, developing or producing oil and natural gas and may prevent or delay the commencement or continuation of a given operation.

~~Table~~Regulations and ofEnvironmental ~~Contents~~Matters

~~requirements regarding~~General. ~~the~~Our ~~rates~~operations ofare ~~production.~~subject ~~State~~to ~~regulation~~a wide variety of ~~gathering~~stringent ~~facilities~~federal, ~~generally~~state ~~includes~~and ~~various~~local laws ~~safety,~~and ~~environmental~~regulations governing the exploration and, inproduction ~~some~~of ~~circumstances,~~oil ~~nondiscriminatory~~and ~~take requirements,~~natural ~~but~~gas, ~~except~~including asdischarge ~~noted~~of ~~above,~~materials ~~does~~into ~~not~~the ~~generally~~environment ~~entail~~or ~~rate~~otherwise ~~regulation~~relating to environmental protection. ~~These~~Our ~~regulatory~~operations ~~burdens~~are ~~may~~subject ~~affect~~to ~~our~~the ~~profitability,~~same environmental laws and weregulations ~~are~~as ~~unable~~other tocompanies ~~predict~~in the ~~future~~oil ~~cost~~and orgas ~~impact~~exploration ~~of complying~~and ~~with~~production ~~such~~industry ~~regulations~~in the areas where we operate. These laws and regulations:

~~Future~~• ~~Regulations~~ require the acquisition of various permits before drilling, workovers, or water injection commences;

~~Proposals~~• ~~and~~require ~~proceedings that may affect~~ the ~~oil~~installation ~~and~~of ~~gas~~expensive ~~industry~~pollution ~~are~~control pending before Congress, BLM, FERC, MMS, state legislatures and commissions, and the courts. We cannot predict when or whether any such proposals may become effective. In the past, the natural gas industry has been heavily regulated. There is no assurance that the regulatory approach currently pursued by various agencies will continue indefinitely. Notwithstanding the foregoing, we do not anticipate that compliance with existing federal, state and local laws, rules and regulations will have a material adverse effect on our capital expenditures, earnings or competitive position. equipment;

~~Failure to~~• ~~comply~~restrict ~~with environmental regulations may result in~~ the ~~imposition of substantial administrative~~types, ~~civil~~quantities ~~or criminal penalties, or restrict or prohibit our desired business activities. Environmental laws~~ and ~~regulations~~concentration ~~impose~~of ~~liability,~~various ~~sometimes strict liability~~substances, ~~for~~including ~~environmental~~without cleanup costs and other damages. Other environmental laws and regulations may delay or prohibit exploration and production activities in environmentally sensitive areas or impose additional costs on these activities. limitation;

~~We believe~~• wenatural ~~are~~gas ~~in compliance with current applicable environmental laws~~ and regulations. We believe the existence and enforcement of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in the energy industry. Costs associated with responding to a major spill of crude oil or produced water, orthat ~~costs~~can ~~associated~~be ~~with remediation~~released ofinto ~~environmental contamination, are~~ the ~~most~~environment ~~likely occurrences that could result~~ in aconnection ~~material~~with ~~adverse~~drilling ~~effect on our business, financial condition~~ and ~~results~~production of operations. There are no pending or threatened claims for any such environmental cleanup costs, and we operate our producing properties in a prudent manner in order to avoid or minimize liability related to any such claims. activities;

~~Changes in~~• ~~applicable~~limit ~~federal,~~or ~~state~~prohibit ~~and~~drilling ~~local~~activities ~~environmental laws and regulations potentially could have a material adverse effect~~ on ~~our~~lands ~~business,~~lying ~~financial~~within ~~condition and results of operations. In this regard~~wildernesses, ~~our~~wetlands ~~CBM drilling~~ and ~~production~~other ~~operations~~protected ~~are subject to ongoing BLM oversight, EIS requirements and recurring BLM approvals, and could be affected by changes in BLM regulations or policies.~~ areas;

~~We anticipate~~• norequire ~~material~~remedial ~~capital~~measures ~~expenditures~~ to ~~comply~~prevent ~~with~~pollution ~~federal~~from ~~and~~former ~~state environmental requirements. In addition~~operations, ~~state-wide~~such ~~reclamation~~as ~~bonds~~pit ~~and~~closures ~~our $50 million casualty~~ and ~~environmental~~plugging ~~insurance policy have been adequate to meet the applicable bonding and insurance requirements to date. Additionally, we have deposited $2.8 million in money market securities as~~ of ~~December 31,~~abandoned ~~2015, as collateral for a $3.2 million reclamation bond for the Wilmington Townlot Unit.~~ wells;

~~Coalbed~~• ~~Methane~~impose ~~Operations. The~~substantial ~~majority~~liabilities offor ~~our~~pollution ~~gas~~resulting ~~production is~~ from ~~CBM operations that generate water discharges and air emissions that are subject to significant regulatory control. Naturally occurring groundwater is produced by~~ our ~~CBM~~ operations. This produced water is disposed of by injection into the subsurface through disposal or water injection wells, and, in some cases, discharge to the surface or in evaporation ponds. Whichever disposal method is used, produced water must be disposed of in compliance with permits issued by state and federal regulatory agencies, and in compliance with applicable state, federal and local environmental regulations. To date, we have been able to obtain necessary surface discharge or disposal well permits, and we have been able to discharge produced water and operate our produced water disposal wells in compliance with our permits and ;

32• require time consuming environmental analyses with respect to operations affecting federal, state and privately owned lands or leases; and

~~Table~~• ofexpose ~~Contents~~us to litigation by environmental and other special interest groups.

~~applicable federal~~These laws, ~~state~~rules and regulations may also restrict the rate of oil and ~~local~~natural ~~laws~~gas production below the rate that would otherwise be possible. The regulatory burden on the oil and ~~regulations~~gas ~~without~~industry ~~undue~~increases the cost of doing business in the industry and consequently affects profitability. These regulations have been changed frequently in the past and, in general, these changes have imposed more stringent requirements that increase operating costs and/or ~~burden~~require capital expenditures to ~~our~~remain ~~business~~in ~~activities~~compliance. Failure to comply with these requirements can result in civil and/or criminal penalties and liability for non-compliance, clean-up costs and other environmental damages, and injunctive relief requiring us to cease production. It also is possible that unanticipated developments or changes in the law could require us to make environmental expenditures significantly greater than those we currently expect. We believe that we substantially comply with all current applicable environmental laws and regulations, and that our continued compliance with existing requirements will not have a material adverse impact on our financial condition or results of

~~Our CBM~~20 operations involve the use of gas-fired generators and compressors to transport the gas we produce. Emissions of nitrogen oxides and other combustion by-products from individual or multiple generators and compressors at one location may be great enough to subject the compressors to state air quality requirements for pre-construction and operating permits. To date, we have not experienced significant delays or problems in obtaining the required air permits and have been able to operate these compressors in compliance with our permits and applicable federal, state and local laws and regulations without undue cost or burden to our business activities. Another air emission associated with our coalbed methane operations that may be subject to regulation and permitting requirements is particulate matter resulting from construction activities and vehicle traffic.

AtlanticTable Rim. In May 2007, the BLM issued its Record of Decision for the Atlantic Rim EIS that allows the development of the Atlantic Rim project by drilling up to 2,000 wells, 1,800 of which are CBM wells and 200 of which are deeper conventional wells. Based on the current knowledge of geologic formations, the BLM's minimum well spacing will be 80 acres per CBM well. Our Washakie Basin CBM production operations are also subject to Wyoming Department of Environmental Quality, or DEQ, regulations and permit requirements. Permits required from the Wyoming DEQ include air emission and produced water discharge permits. To date, we have not experienced any difficulties in obtaining any air permits needed for our Washakie Basin operations from the Wyoming DEQ. Disposal of produced water is limited to subsurface injection in the portion of the Washakie Basin within the Colorado River drainage area. We have received permits for a sufficient number of water injection wells in the Atlantic Rim project; however, we will need to obtain permits for additional injection wells, in the event we need additional subsurface disposal capacity. Contents

WilmingtonIndex Field. The Wilmington Townlot Unit, or WTU, and the North Wilmington Unit, or NWU, are located in a mixed industrial and residential area near the Port of Los Angeles, California. Field activities include drilling wells to developFinancial our lease acreage and operating a waterflood to maximize crude oil production. Stringent environmental regulations, restrictive permit conditions and the possibility of permit denials from a multiplicity of state, regional and local regulatory agencies may inhibit, curtail or add cost to future Wilmington field development activities. Despite prudent operation and preventative measures, drilling, waterflooding and production operations may result in spills and other accidental releases of produced water, hydrocarbons or injection fluids. Remediation and associated costs for a release of produced water, hydrocarbons or injection fluids in an urban environment could be significant. This potential liability is accentuated by the location of our WTU and NWU leases in or near residential areas, and being within a historically active oil field. Statements

~~Because~~ ~~the gas volume from the WTU was historically too low to justify gas sales equipment, the gas had been flared for many years under a permit from the SCAQMD~~operations. ~~In late 2007~~However, we ~~entered~~ ~~into~~cannot anpredict ~~agreement with~~ the ~~SCAQMD~~passage ~~which~~of ~~allowed~~or usquantify tothe ~~commission~~potential ~~six~~impact ~~microturbines~~of tomore ~~generate~~stringent ~~electrical~~future ~~power~~laws ~~from the otherwise flared gas~~ and ~~resume~~regulations ~~full~~at ~~production~~this time. AsFor ~~oil production grew,~~ the ~~excess~~year ~~gas~~ended ~~produced~~December 31, ~~but not consumed by our microturbines began to exceed our current gas flare permit limitation. In March 2008~~2016, we ~~presented our plan to the SCAQMD to seek approvals from~~ ~~regulatory~~did ~~authorities~~not toincur ~~dispose~~any ofmaterial ~~our~~expenditures ~~WTU~~for ~~produced~~remediation ~~gas by re-injecting it in underground formations~~ or bypollution selling it directly to a nearby public utility or a third party user. We also applied to the SCAQMD for a permit to construct a new high efficiency clean enclosed burner to replace the existing gas flare. Our permit applications requested the authority to install and operate certain pieces of new best available control ~~technology ("BACT")~~ equipment. Onat ~~July 19,~~any ~~2011 the SCAQMD certified the Company's CEQA documents and issued all~~ of ~~the related permits, including gas handling equipment. These equipment upgrades will help increase~~ our ~~oil processing capability to approximately 5,000 barrels of oil per day at the Wilmington Townlot Unit~~facilities. ~~In 2011, we installed the high efficiency burner and began pursuing permits and agreements necessary to dispose of the associated gas by~~

33The environmental laws and regulations which could have a material impact on the oil and natural gas exploration and production industry are as follows:

~~Table~~National Environmental Policy Act. Oil and natural gas exploration and production activities on federal lands are subject to the National Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the Department of ~~Contents~~Interior, to evaluate major agency actions having the potential to significantly impact the environment. In the course of such evaluations, an agency will have an EA prepared that assesses the potential direct, indirect and cumulative impacts of a proposed project. If impacts are considered significant, the agency will prepare a more detailed EIS that may be made available for public review and comment. All of our current and proposed exploration, production and development plans on federal lands require governmental permits that are subject to the requirements of NEPA. This process has the potential to delay the development of oil and natural gas projects. Authorizations under NEPA also are subject to protest, appeal or litigation, which can delay or halt projects.

~~injecting it~~Some inof ~~underground~~our ~~reservoirs~~exploration orand ~~selling~~production itactivities tooccur aon ~~third~~federal ~~party~~leases. InThis ~~2012,~~is ~~the~~particularly ~~gas~~true ~~injection~~of ~~project~~our ~~was~~CBM ~~substantially~~operations. ~~delayed~~Exploration byand production ~~the~~operations ~~DOGGR,~~on ~~which~~federal ~~caused~~leases ~~Warren~~are togenerally ~~commit~~performed toin ~~selling~~accordance ~~all~~with ofa ~~the gas,~~record ~~rather~~of ~~than~~decision ~~injecting~~issued ~~it. As required~~ by the ~~SCAQMD,~~Bureau inof ~~2012~~Land weManagement ~~began~~(“BLM”) ~~preparing~~after anpreparation ~~additional~~of ~~analysis~~an ~~under~~EA ~~CEQA~~or toEIS. ~~analyze~~A ~~and~~record ~~mitigate~~of ~~the~~decision ~~potential~~typically ~~air and other emissions that may be~~includes ~~associated~~environmental ~~with pipeline connections~~ and ~~installation~~land ofuse ~~gas~~provisions ~~transportation,~~that ~~compression~~restrict and ~~related~~limit ~~equipment~~exploration ~~that will be required to sell excess gas to third parties. This additional CEQA analysis was completed in late 2014,~~ and ~~construction~~production ~~permits~~activities ~~were~~on ~~issued~~federal ~~by the SCAQMD~~leases. ~~Warren~~Much isof ~~currently~~our ~~constructing~~CBM ~~and~~operations ~~installing~~are ~~the~~subject ~~gas~~to ~~transportation,~~records ~~compression~~of ~~and related equipment~~decision, and ~~anticipates~~ ~~that~~we ~~this~~have ~~new~~not ~~gas~~experienced ~~sales~~any ~~system~~material ~~will~~difficulty bein ~~operational~~complying with intheir ~~late~~terms ~~2015~~and conditions.

Waste Handling. The Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes affect oil and gas exploration and production activities by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of “hazardous wastes” and on the disposal of non-hazardous wastes. Under the auspices of the Environmental Protection Agency, or EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own more stringent requirements. Drilling fluids, produced waters and most of the other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal energy constitute “solid wastes”, which are regulated under the less stringent non-hazardous waste provisions, but there is no guarantee that the EPA or the individual states will not adopt more stringent requirements for the handling of ~~Operating~~non-hazardous ~~Hazards~~wastes or categorize some non- hazardous wastes as hazardous for future regulation. Legislation has been proposed from time to time in Congress to re-categorize certain oil and ~~Insurance~~ gas exploration and production wastes as “hazardous wastes”.

~~The~~We believe ~~oil~~we ~~and~~are ~~natural~~in ~~gas~~substantial ~~business~~compliance ~~involves~~with athe ~~variety~~requirements of ~~operating~~RCRA ~~risks,~~and ~~including~~related ~~fires,~~state ~~explosions,~~and ~~blowouts,~~local ~~environmental~~laws ~~hazards~~and regulations, ~~spills~~ orand ~~releases~~that ofwe ~~crude~~hold ~~oil,~~all ~~produced~~necessary ~~water~~ and ~~injection fluids~~up-to-date permits, registrations and other ~~potential~~authorizations ~~events~~to ~~which~~the ~~could~~extent ~~have~~our aoperations ~~material~~require ~~adverse~~them ~~effect~~under onsuch ~~our~~laws ~~business, financial condition~~ and ~~results of operations~~regulations. ~~Any~~Although ofwe ~~these~~believe ~~problems~~the ~~could~~current ~~adversely~~costs ~~affect~~of managing our ~~ability~~wastes toas ~~conduct~~they ~~operations~~are ~~and~~presently ~~cause~~classified usare toreflected ~~incur~~in ~~substantial~~our ~~losses.~~budget, ~~Such~~any legislative ~~losses~~or ~~could~~regulatory ~~reduce~~reclassification orof ~~eliminate~~oil ~~the~~and ~~funds~~natural ~~available~~gas ~~for~~ exploration, and production orwastes ~~leasehold~~could ~~acquisitions,~~increase orour ~~result~~costs inof ~~the~~managing ~~loss~~and disposing of ~~certain~~such ~~properties~~wastes.

InComprehensive Environmental Response, Compensation and Liability Act. The Comprehensive Environmental Response, Compensation and ~~accordance~~Liability ~~with~~Act ~~industry~~(“CERCLA”), ~~practice~~also known as the “superfund” law, weimposes ~~maintain~~joint ~~insurance~~and ~~against~~several ~~some~~liabilities, ~~but~~without ~~not~~regard ~~all~~to fault or legality of conduct, ~~potential~~on ~~risks~~classes ~~and~~of ~~losses.~~persons Wewho doare ~~not~~considered ~~carry~~to ~~business~~be ~~interruption~~responsible ~~insurance~~for the release of a “hazardous substance” into the environment. ~~For~~These ~~some~~persons ~~risks~~include the owner or operator of the disposal site, weor ~~may~~site where the release occurred, and companies that disposed or arranged for the disposal of the hazardous substance. Under ~~elect~~CERCLA, ~~not~~such persons may be subject to ~~obtain~~joint ~~insurance~~and ifseveral weliabilities ~~believe~~for the ~~cost~~costs of ~~available~~cleaning ~~insurance~~up isthe ~~excessive~~hazardous ~~relative~~substances that have been released into the environment, for damages to natural resources and for the ~~risks~~costs ~~presented~~of certain health studies. In addition, ~~pollution~~it is not uncommon for neighboring landowners and ~~environmental~~other ~~risks~~third ~~generally~~parties ~~are~~to ~~not~~file ~~fully insurable~~claims atfor apersonal ~~reasonable~~injury ~~cost.~~and Ifproperty adamage ~~significant~~allegedly ~~accident~~caused orby ~~other~~the ~~event~~hazardous ~~occurs~~substances ~~and~~released into the environment. Although petroleum is ~~not~~excluded ~~fully~~from CERCLA’s ~~covered~~definition byof ~~insurance~~“hazardous substance”, itin ~~could~~the ~~have~~course aof ~~material~~our ~~adverse~~operations, ~~effect~~we onuse ~~our~~materials ~~business~~that, ~~financial~~if ~~condition~~released, ~~and~~would be subject to CERCLA. Therefore, governmental agencies or third parties may seek to hold us responsible under ~~results~~CERCLA for all or part of ~~operations~~the costs to clean up sites at which such “hazardous substances” have been deposited.

In21 most situations, as is customary in the oil and gas industry, only a preliminary title examination is conducted at the time we acquire oil and gas leases covering properties for possible drilling operations. Prior to the commencement of drilling operations, a more complete title examination of the drill site tract is usually conducted by independent attorneys or landmen, or in the case of an existing unit, historical title examinations are relied upon to some extent. Once production from a given well is established, we prepare a title or division of interest report indicating the proper parties and percentages for payment of production proceeds, including royalties. The level of title examination often differs from property to property.

Our propertiesTable are subject to customary royalty interests, provisions, liens incident to operating agreements, liens for current taxes and other burdens which, on an individual lease basis, we believe do not materially interfere with the use of or affect the carrying value of our properties. Contents

Employees Index to Financial Statements

At have ~~December 31,~~a ~~2015,~~material weadverse ~~had~~effect 75on ~~full-time~~our ~~employees~~operations. We ~~believe~~may ~~that~~not ~~our~~be ~~relationships~~fully ~~with~~insured ~~our~~for ~~employees~~these ~~are good~~costs. ~~None~~We ofmaintain all required discharge permits necessary to conduct our ~~employees~~ ~~are~~operations, ~~covered~~and bywe abelieve ~~collective~~we substantially ~~bargaining~~comply ~~agreement~~with the terms thereof. ~~From~~Obtaining ~~time~~permits tohas ~~time,~~the wepotential ~~use~~to delay the ~~services~~development of ~~independent~~oil ~~consultants~~and tonatural ~~perform~~gas ~~various~~projects. ~~professional~~We ~~services,~~anticipate ~~particularly~~that intotal ~~the~~maximum ~~areas~~daily ofload water quality standards established under Clean Water Act ~~geological,~~delegated ~~permitting~~programs ~~and~~may EAbe ~~activities~~promulgated for surface water bodies in areas where we operate. ~~Independent~~However, ~~contractors~~we ~~often~~do ~~perform~~not ~~well~~expect ~~drilling~~that ~~and~~any ~~production~~total ~~operations~~maximum daily load regulations, ~~including~~or ~~pumping~~standards promulgated in any area where we operate, ~~maintenance~~will result in a material increase in our produced water disposal costs because we already inject much of our produced water in disposal wells, ~~dispatching~~rather than discharging into surface water bodies, ~~inspection~~and would be able to cost-effectively drill and ~~testing~~operate additional disposal wells as needed.

Air Emissions. The Federal Clean Air Act and associated state laws and regulations regulate emissions of various air pollutants through the issuance of permits and the imposition of other requirements. In addition, the EPA has developed, and continues to develop, stringent regulations governing emissions of toxic air pollutants at specified sources. Some of our new facilities will be required to obtain permits before work can begin, and existing facilities may be required to incur capital costs in order to remain in compliance. Major sources of air pollutants are subject to more stringent, federally based permitting requirements. On April 17, 2012, the EPA issued a final rule that established new source performance standards for volatile organic compounds (“VOCs”) and sulfur dioxide, an air toxics standard for major sources of oil and natural gas production, and an air toxics standard for major sources of natural gas transmission and storage. These regulations apply to natural gas wells that are hydraulically fractured, or refractured, and to storage tanks and ~~Offices~~ other equipment. Since January 1, 2015, all wells subject to the rule have been required to use “green completion” technology to limit emissions during well completion operations.

~~Our~~Because ~~principal~~of ~~executive~~the ~~offices~~severity ~~are~~of ~~located~~ozone atlevels ~~1331~~in ~~17th Street~~portions of California, ~~Ste~~the state has the most severe restrictions on emissions of VOCs and nitrogen oxides (“NOX”) of any state. ~~720,~~Producing ~~Denver~~wells, COnatural ~~80202,~~gas plants and electric generating facilities all generate VOCs and NOX. Some of our ~~telephone~~producing wells are in counties that are designated as ~~number~~non-attainment isfor ozone and, therefore, potentially are subject to restrictive emission limitations and permitting requirements. California also operates a stringent program to control hazardous (~~720~~toxic) ~~403-~~ ~~8125~~air pollutants, and this program could require the installation of additional controls. WeAdministrative ~~lease~~enforcement ~~approximately~~actions 8for failure to comply strictly with air pollution regulations or permits generally are resolved by payment of monetary fines and correction of any identified deficiencies. Alternatively,~~347~~ ~~square~~regulatory ~~feet~~agencies could require us to forego construction, modification or operation of ~~office~~certain ~~space~~air-emission sources. Air emissions from oil and natural gas operations also are regulated by oil and natural gas permitting agencies, including in California, the South Coast Air Quality Management District, the California Air Resources Board and other local agencies. These regulations may increase the costs of compliance for ~~our~~some ~~Denver~~facilities we own or operate, COand ~~office~~federal ~~under~~and astate ~~lease~~regulatory ~~that~~agencies ~~expires~~can impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the Federal Clean Air Act and associated state laws and regulations. We believe we are in ~~July~~substantial ~~2021~~compliance with all air emissions regulations, and that we hold all necessary and valid construction and operating permits for our operations. ~~Our~~Obtaining permits has the potential to delay the development of our oil and natural gas ~~operations~~projects. ~~office~~See in“Future Regulation—Wilmington Field” below.

34The Safe Drinking Water Act, Groundwater Protection, and the Underground Injection Control Program. The Federal Safe Drinking Water Act (“SDWA”) and the Underground Injection Control (“UIC”) program promulgated under the SDWA and state programs regulate the drilling and operation of salt water disposal wells. The EPA directly administers the UIC program in some states and in others it is delegated to the state for administering. Permits must be obtained before drilling salt water disposal wells, and casing integrity monitoring must be conducted periodically to ensure the casing is not leaking saltwater to groundwater. Contamination of groundwater by oil and natural gas drilling, production and related operations may result in fines, penalties and remediation costs, among other sanctions and liabilities under the SDWA and state laws. In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages and bodily injury.

~~Table~~We engage third parties to occasionally provide hydraulic fracturing or other well stimulation services to us in connection with many of ~~Contents~~the wells for which we are the operator. With the exception of hydraulic fracturing using diesel fuel, the SDWA exempt hydraulic fracturing from regulation under the UIC program. On February 12, 2014, the EPA released an “interpretative memorandum” providing technical recommendations for implementing UIC requirements for hydraulic fracturing activities using diesel fuels. In this guidance document, EPA expansively defined the term “diesel” to include hydrocarbons such as kerosene that have not typically been considered to be diesel. Bills which would have repealed the hydraulic fracturing exemption have been introduced in the last three sessions of Congress. In addition, the EPA is conducting a congressionally-mandated study on the effects of hydraulic fracturing on drinking water resources. The EPA issued a final draft report in June 2015 for peer review and public comment. The EPA study, or other studies, of hydraulic fracturing could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory programs. In addition to federal regulation, certain states have adopted and are considering laws that require the disclosure of the chemical constituents in hydraulic fracturing fluids. Moreover, the Department of the Interior issued rules in March 2015 that modify regulations for hydraulic fracturing activities on federal and Indian lands, including chemical disclosure, well bore integrity and handling of flow back water. Additional disclosure and operational requirements could result in increased regulation, operational delays and increased operating costs that could make it more difficult to perform hydraulic fracturing.

~~Casper, Wyoming~~22 occupies 1,174 square feet under a lease that expired in October 2014 and is currently month to month. Our oil and gas operations office in Long Beach, California occupies 14,201 square feet of space under a lease that expires in April 2020. We lease additional space for our other offices located in New York, NY, Houston, TX and Plano, TX which occupy 4,178 square feet, 3,568 square feet and 4,998 square feet and expire in 2016, 2016 and 2017, respectively. We also have field offices inTunkhannok, Pennsylvania, Wilmington, California and Rawlins, Wyoming. We believe that our facilities are adequate for our current operations.

Our websiteTable address is http://www.warrenresources.com. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC at http://www.sec.gov. Additionally, our Code of Business Conduct and Ethics, which includes our code of ethics for senior financial management, Corporate Governance Guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website and are available in print free of charge to any stockholder who requests them. Requests should be sent by mail to our corporate secretary at our principal office at 1331 17th Street, Suite 720, Denver, CO 80202. Information contained on, or connected to, our website is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC. Contents

Index Item 1A. Riskto Factors Financial Statements

~~You~~California ~~should~~Environmental beQuality ~~aware~~Act ~~that~~(“CEQA”). ~~the~~CEQA ~~occurrence~~is ofa ~~any of the events described in this Risk Factors section and~~California ~~elsewhere~~statute inthat ~~this~~requires ~~annual~~consideration ~~report on Form 10-K or in any other~~ of ~~our filings with~~ the ~~Securities~~environmental ~~and~~impacts ~~Exchange~~of ~~Commission~~proposed ~~could~~actions ~~have~~that amay ~~material~~affect ~~adverse~~the ~~effect on our business, financial position, liquidity and results of operations~~environment. InCEQA ~~evaluating~~often ~~us,~~requires ~~you should consider carefully, among other things,~~ the ~~factors~~responsible ~~and~~governmental ~~the~~agency ~~specific~~to ~~risks~~prepare ~~set~~an ~~forth~~environmental ~~below.~~impact ~~This~~analysis ~~annual~~document ~~report on Form 10-K contains forward-looking statements~~ that ~~involve~~is ~~risks~~made ~~and uncertainties. See "Cautionary~~available ~~Statement~~for ~~Regarding~~public ~~Forward-Looking Statements" in this annual report on Form 10- K~~comment. ~~Some~~In ofsome ~~the~~cases, ~~following risks relate principally to~~ the ~~industry~~responsible inagency ~~which~~also weis ~~operate~~required ~~and~~ to ~~our~~consider ~~business~~mitigation measures. ~~Other~~ ~~risks~~The ~~relate~~party ~~principally~~requesting toagency ~~the~~action ~~securities~~bears ~~markets and ownership of our common shares. If any of~~ the ~~following~~expense ~~risks develop into actual events, our business, financial condition or results~~ of ~~operations~~ ~~could be materially adversely affected,~~ the ~~trading price of your shares could decline, and you may lose all or part of your investment~~document.

In 2014, after a lengthy CEQA analysis, we received permit approvals from the South Coast Air Quality Management District (“SCAQMD”) for the disposal of our WTU associated and produced gas. These permits allow us (i) to burn gas using a new high efficiency clean enclosed burner to replace the existing gas flare, and (ii) eventually, to sell the gas directly to a third ~~Risks~~party ~~Relating~~user by transporting the gas through transmission facilities owned by local gas utility companies. In the future, we may be required to undergo the ~~Oil~~CEQA process for other proposed actions by state and ~~Natural~~local ~~Gas~~governmental ~~Industry~~authorities that meet specified criteria. At a minimum, the CEQA process delays and ~~Our~~adds ~~Business~~ expense to the process of obtaining new permits and permit renewals. See “Future Regulation—Wilmington Field” below.

Abandonment, Decommissioning and Remediation Requirements. Federal, state and local regulations provide detailed requirements Wefor ~~require~~the ~~significant~~abandonment ~~additional~~of ~~financing~~wells, toclosure ~~continue~~or asdecommissioning aof ~~going~~production ~~concern~~and transportation facilities, and ~~pay~~the ~~outstanding liabilities~~environmental restoration of operations sites. The California Department of Conservation, Division of Oil, Gas and Geothermal Resources (“DOGGR”) is the ~~prevailing~~principal ~~commodity~~state ~~price~~agency ~~environment~~responsible ~~may~~for ~~require~~regulating usthe todrilling, ~~restructure~~operation, ~~our~~maintenance ~~debt~~and orabandonment ~~seek~~of ~~bankruptcy~~all ~~protection~~oil and natural gas wells in the state of California.

~~Due~~Significant topotential ~~the~~costs ~~nature~~relating ofto ~~oil~~environmental and ~~gas~~land-use ~~interests,~~regulations ~~i.e., that~~associated ~~rates~~with ofour existing ~~production~~properties ~~generally decline over time as oil~~ and ~~gas~~operations ~~reserves are~~include ~~depleted,~~those ifrelating ~~we are unable~~ to ~~drill~~(i) plugging ~~additional wells~~ and ~~develop~~abandonment ~~our~~of ~~PUDs~~facilities, ~~either~~(ii) clean-up ~~because~~costs weand ~~are~~damages ~~unable~~due to ~~raise~~spills or ~~generate~~other ~~sufficient~~releases, ~~capital~~and (iii) penalties imposed for ~~such development activities~~spills, orreleases ~~otherwise,~~ or ~~in the~~non-compliance ~~event~~with weapplicable ~~are~~laws ~~unable~~and toregulations. ~~acquire~~As ~~additional~~is ~~operating~~customary ~~properties,~~in wethe ~~believe~~oil ~~that~~and ~~our~~natural ~~revenues~~gas ~~will continue to decline over time. Furthermore~~industry, ~~in the event~~ we ~~are~~typically ~~unable~~have tocontractually ~~raise~~assumed, orand ~~generate additional~~may ~~capital~~assume in the future, certain weobligations ~~will~~relating ~~not be able~~ to ~~complete~~plugging ~~other drilling~~ and~~/or~~ ~~workover activities~~abandonment, clean-up and ~~may~~other ~~not~~environmental becosts ~~able~~in toconnection ~~make~~with ~~required payments on~~ our ~~outstanding~~acquisition ~~liabilities,~~of ~~including~~operating ~~our debt~~interests ~~service obligations. Therefore,~~ in ~~the~~oil ~~event~~and wegas ~~have a capital shortfall~~fields, ~~we will be forced to scale back our business plan, sell or liquidate assets to satisfy outstanding debts~~ and~~/or~~ ~~take other~~these ~~steps~~costs ~~which~~can ~~may include seeking bankruptcy protection~~be significant.

~~In light~~Climate ofChange ~~prevailing~~Legislation ~~oil~~and ~~prices~~Greenhouse ~~and~~Gas ~~the~~Regulations. ~~necessity~~Recent ofand afuture ~~debt~~environmental ~~restructuring~~regulations, including ~~Warren~~additional ~~elected~~federal toand ~~not~~state ~~make~~restrictions ~~the~~on ~~approximately~~greenhouse ~~$7.5 million~~gas ~~interest~~(“GHG”) ~~payment~~emissions ~~due~~that ~~February 1~~have been or may be passed in response to climate change concerns, ~~2016~~may increase our operating costs and also reduce the demand for the oil and onnatural ~~its~~gas ~~Senior~~we ~~Notes~~produce. ~~The~~

35Studies over recent years have indicated that emissions of certain gases may be contributing to warming of the Earth’s atmosphere. In response to these studies, many nations have agreed to limit emissions of GHG pursuant to the United Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” Methane, a primary component of natural gas, and carbon dioxide, a byproduct of the burning of oil, natural gas and refined petroleum products, are considered “greenhouse gases” regulated by the Kyoto Protocol. Although the United States is not participating in the Kyoto Protocol, the United States Supreme Court has ruled, in Massachusetts, et al. v. EPA, that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decision and the change in presidential administrations, on December 7, 2009, the EPA issued a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions limits under the Clean Air Act, even without Congressional action. As part of this array of new regulations, on September 22, 2009, the EPA also issued a GHG monitoring and reporting rule that requires certain parties, including participants in the oil and natural gas industry, to monitor and report their GHG emissions, including methane and carbon dioxide, to the EPA. On November 30, 2010, the EPA published a final rule that set forth reporting requirements for the petroleum and natural gas industry. This rule requires companies that hold state drilling permits and that emit 25,000 metric tons or more of carbon dioxide equivalent per year to report annual carbon dioxide, methane and nitrous oxide emissions from certain sources beginning on March 31, 2012. These reporting obligations continue in effect.

~~Table~~The EPA has also issued a notice of ~~Contents~~finding and determination that emissions of carbon dioxide, methane and other GHGs present an endangerment to human health and the environment, which allows the EPA to begin regulating emissions of GHGs under existing provisions of the Clean Air Act. The EPA has begun to implement GHG-related reporting and permitting rules for certain stationary sources. Beginning in 2012, the EPA has issued regulations aimed at reducing greenhouse gas emission, including methanol from oil and gas activities and recently announced plans to issue additional rules which target methane emissions from the oil and gas sector. The EPA’s finding, the greenhouse gas reporting rules, and the rules to regulate the emissions of greenhouse gases may affect the outcome of other climate change lawsuits pending in United States federal courts in a manner unfavorable to our industry. Similarly, the U.S. Congress has considered, and may in the future consider, “cap and trade” legislation that would establish an economy-wide cap on emissions of GHGs in the United States and would require most sources of GHG emissions to obtain GHG emission “allowances” corresponding to their annual emissions of GHGs. Future federal climate change legislation could adversely impact our operations.

~~applicable 30-day~~23 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 to declare the entire principal amount of the Senior 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 agreement (the "First Lien Credit Facility") by and among the Company, Wilmington Trust, National Association as Administrative Agent, and the lenders from time to time a party thereto and its second lien credit facility (the "Second Lien Credit Facility") by and among the Company, Cortland Capital Market Services, LLC, as Administrative Agent, and the lenders from time to time a party thereto (collectively, the "Credit Facilities"), 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 Warren's debt obligations has occurred.

Although WarrenTable 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. Contents

These conditionsIndex raise substantial doubt about our ability to continueFinancial as a going concern for the next twelve months. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The accompanying Report of Independent Registered Public Accounting Firm on our financial statements also includes a going concern paragraph. Statements

In addition to the EPA’s actions to regulate GHGs, more than ~~Significant~~one-third ~~declines~~of the states have begun taking action on their own to control and/or ~~continuation~~reduce emissions of ~~currently~~greenhouse ~~low~~gases. ~~prices~~Several inmulti-state ~~oil~~programs ~~and~~have ~~natural~~been ~~gas~~developed ~~will~~or ~~adversely~~are in the process of being developed: ~~affect~~the ~~our~~Regional ~~ability~~Greenhouse toGas ~~meet~~Initiative ~~our~~involving ~~capital~~10 ~~expenditure~~Northeastern ~~obligation~~states and ~~financial~~three ~~commitments~~Canadian provinces, the Western Climate Initiative involving California and four Canadian provinces, and the Midwestern Greenhouse Gas Reduction Accord involving seven states and one Canadian province. Any of the climate change regulatory and legislative initiatives described above could have a material adverse effect on our business, financial condition, and results of operations. On September 27, ~~cash~~2006, California’s ~~flows~~governor signed into law Assembly Bill (AB) 32, ~~access~~known as the “California Global Warming Solutions Act of 2006,” which establishes a statewide cap on GHGs that will reduce the state’s GHG emissions to ~~capital~~1990 levels by 2020 and ~~ability~~establishes a “cap and trade” program. The California Air Resources Board adopted regulations in December 2010 to ~~grow~~implement AB 32 that commenced on January 1, 2012.

Our ~~revenues,~~operations ~~operating~~could ~~results,~~be ~~cash~~adversely ~~flow,~~impacted ~~profitability~~by current and future ~~rate~~state ~~of growth depend upon the prevailing prices of,~~ and ~~demand for,~~local ~~oil~~climate ~~and~~change ~~natural gas~~initiatives. All of our operating revenues are derived from the sale of our oil and natural gas production. If the currently depressed prices in oil and natural gas do not improve, this will continue to impose material adverse effects on our financial position, our ability to meet our capital expenditure obligations and commitments, our results of operations, our access to capital and the quantities of oil and natural gas that may be economically produced by us. Decreases or continuation in depressed price levels for an extended period negatively affects us in several ways including:

~~In light~~Threatened ofand ~~prevailing~~endangered ~~oil~~species, ~~prices~~migratory birds, and ~~the~~natural ~~necessity~~resources. ofVarious astate ~~debt~~and ~~restructuring~~federal statutes prohibit certain actions that adversely affect endangered or threatened species and their habitat, ~~Warren~~migratory ~~elected~~birds, towetlands ~~not~~and ~~make~~natural resources. These statutes include the ~~approximately~~Endangered ~~$7.5 million~~Species ~~interest~~Act, ~~payment~~the ~~due~~Migratory ~~February 1~~Bird Treaty Act, ~~2016~~the onClean ~~its~~Water ~~Senior Notes~~Act and CERCLA. The United ~~applicable~~States ~~30-day~~Fish ~~grace~~and ~~period~~Wildlife ~~for~~Service ~~such~~may ~~interest~~designate ~~payment~~critical ~~has~~habitat ~~expired,~~ and ~~consequently~~suitable anhabitat ~~event~~areas that it believes are necessary for survival of ~~default~~threatened ~~under~~or ~~the~~endangered ~~indenture~~species. ~~governing~~A ~~such~~critical ~~notes~~habitat ~~has~~or ~~occurred~~suitable habitat designation could result in further material restrictions to federal land use and isprivate ~~continuing~~land use and could delay or prohibit land access or development. ~~This~~Where takings of or harm to species or damages to wetlands, habitat or natural resources occur or may occur, government ~~status~~entities ~~gives~~or ~~the~~at ~~indenture~~times ~~trustee~~private parties may act to prevent oil and ~~the~~gas ~~holders~~exploration ofactivities ~~not~~or ~~less~~seek ~~than~~damages ~~25%~~for inharm ~~aggregate~~to ~~principal~~species, ~~amount~~habitat or natural resources resulting from drilling or construction or releases of ~~the~~oil, ~~Senior~~wastes, hazardous substances or other regulated materials, and may seek natural resources damages and in some cases, criminal penalties.

36Hazard Communications and Community Right to Know

~~Table~~We are subject to federal and state hazard communications and community right to know statutes and regulations. These regulations govern record keeping and reporting of ~~Contents~~the use and release of hazardous substances, including, but not limited to, the federal Emergency Planning and Community Right-to-Know Act.

~~Notes the~~Occupational ~~right~~Safety ~~declare the entire principal amount of the Senior Notes plus accrued~~ and ~~unpaid~~Health ~~interest~~Act 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 the Credit Facilities to be immediately due and payable. However, thus far, no such acceleration of Warrens debt obligations has occurred. Nevertheless, these debt instruments are now reclassified from long-term liabilities to current liabilities.

~~Although Warren~~We isare ~~continuing~~subject to ~~seek~~the arequirements ~~workable~~of ~~agreement~~the ~~regarding~~federal aOccupational ~~consensual,~~Safety ~~out-of-court~~and ~~restructuring~~Health ~~of its indebtedness~~Act, acommonly ~~failure~~referred to ~~achieve~~as ~~such~~OSHA, anand ~~agreement~~comparable ~~will likely~~state ~~necessitate~~statutes ~~seeking~~that regulate the protection ~~from~~of ~~its~~the ~~creditors~~health ~~through~~and asafety ~~bankruptcy~~of ~~proceeding,~~workers. inIn ~~order~~addition, tothe ~~preserve~~OSHA ~~and~~hazard ~~maximize~~communication ~~value~~standard ~~for~~requires ~~its~~that ~~stakeholders.~~information ~~Furthermore,~~be ~~Warren~~maintained ~~and~~about ~~its~~hazardous ~~lenders~~materials ~~are~~used ~~continuing~~or ~~to evaluate~~produced ~~whether~~in aoperations ~~consensual~~and ~~restructuring~~that ~~should~~this information be ~~effected~~provided ~~outside~~to oremployees, ~~through~~state aand ~~bankruptcy~~local ~~proceeding~~government authorities and the public.

~~Oil~~Operating ~~and~~Regulation ~~natural gas prices are volatile. Volatility in oil and natural gas prices can adversely affect our business, financial condition and results~~ of ~~operations.~~the ~~This~~Oil ~~volatility also makes valuation of oil~~ and ~~natural~~Gas ~~gas~~Industry ~~producing properties difficult and can disrupt markets.~~

~~Oil~~In addition to environmental laws and ~~natural~~regulations, exploration, production and operations in the oil and gas ~~prices~~industry ~~have~~are ~~historically~~extensively ~~been~~regulated by numerous federal, state and ~~are~~local ~~likely~~authorities. toLegislation ~~continue~~affecting tothe beoil and gas industry is under constant review for amendment or expansion, ~~volatile~~frequently increasing the regulatory burden. ~~Oil~~Numerous departments and ~~natural~~agencies, ~~gas~~both ~~prices~~federal ~~are subject~~and tostate, ~~wide~~are ~~fluctuations~~authorized inby ~~response~~statute to ~~relatively~~issue ~~minor~~rules ~~changes~~and inregulations binding on the ~~supply~~oil and gas industry, some of ~~and~~which ~~demand~~carry substantial penalties for failure to comply. Although the regulatory burden on the oil and ~~natural~~ gas, ~~market~~industry ~~uncertainty~~increases our cost of doing business and, aconsequently, ~~variety~~affects ofour ~~additional~~profitability, ~~factors~~these ~~that~~burdens ~~are~~generally ~~beyond~~do ~~our~~not ~~control. Some~~affect ofus any differently or to any greater or lesser extent than they affect other companies in the ~~factors~~industry ~~that~~with ~~cause~~similar ~~these~~types, ~~fluctuations~~quantities ~~are:~~and locations of production.

37Drilling and Production. Our drilling and production operations are subject to various types of regulation at federal, state and local levels. These types of regulation include requiring permits and bonds for the drilling of wells and reports concerning operations. Most states and some counties and municipalities in which we operate also regulate one or more of the following:

~~Table~~• the location of ~~Contents~~wells;

~~Additionally, continuance~~• of the ~~current~~method ~~lower~~of ~~natural~~drilling ~~gas price environment, further declines in natural gas prices~~ and ~~the~~casing ~~lack of natural gas storage may have the following effects on our business:~~wells;

~~The long-term~~• ~~effects of these and other conditions on~~ the ~~prices~~rates of oil and natural gas are uncertain. Price volatility makes it difficult to budget and project the return on exploration and development projects involving our oil and natural gas properties and to estimate with precision the value of producing properties that we may own or propose to acquire. In addition, unusually volatile prices often disrupt the market for oil and natural gas properties as buyers and sellers have more difficulty agreeing on the purchase price of properties. Our cash flow and results of operations depend to a great extent on the prevailing prices for oil and natural gas. Our annual and quarterly results of operations may fluctuate significantly as a result of, among other things, variations in oil and natural gas prices and production performance. In recent years, oil and natural gas price volatility has become increasingly severe, and continuing volatility may have a material adverse effect on our future business, financial condition and results of operations. ;

~~In addition,~~• ~~the~~underground ~~assets~~injection ~~in the Marcellus Shale have a natural gas supply agreement with a subsidiary~~ of ~~Procter~~water and Gamble. During the years ended December 31, 2014 and 2015, approximately 27.8% and 31.8%, respectively, of the assets production was sold pursuant to this agreement. During these same periods, the prices that were received for production under this contract generally were higher than the prices received for natural gas from other third parties. The customer has elected to terminate the agreement effective June 30, 2016. While we are in discussions with the customer to renew or extend the agreement, there can be no assurance that we will be successful in doing so or that the price secured under the contract will be advantageous compared to market pricing at the time of sale. If we are unable to renew or extend the agreement, or if we negotiate a price that is lower than what is ultimately available in the open market, our revenues may be unfavorably impacted. substances;

~~Our~~• ~~Credit Facilities and~~ the ~~indenture~~surface ~~governing~~use ~~our Senior Notes contain operating~~ and ~~financial restrictions~~restoration ~~that~~of ~~may~~properties ~~restrict~~upon ~~our~~which ~~business~~wells ~~and~~are ~~financing activities.~~ drilled;

~~Our~~• ~~Credit Facilities and~~ the ~~indenture~~plugging ~~governing our Senior Notes (the "Indenture") contain,~~ and ~~any~~abandoning ~~future indebtedness we incur may contain, a number~~ of ~~restrictive~~wells; ~~covenants that will impose significant operating~~ and ~~financial restrictions on us, including restrictions on our ability to, among other things:~~

38• notice to, and consultation with, surface owners and other third parties.

~~Table~~24 ~~of Contents~~

In addition,Table we are required under our First Lien Credit Facility to maintain compliance with certain ratios of secured debt to EBITDA as of June 30, 2016. Contents

As aIndex result of these covenants, we will be limited in the manner in which we conduct our business, and we will be unable to engageFinancial in favorable business activities or finance future operations or capital needs. Statements

~~Our ability~~State tolaws ~~comply~~regulate ~~with~~the ~~some~~size ofand ~~the~~shape ~~covenants~~of drilling and ~~restrictions~~spacing ~~contained~~units inor ~~our~~proration ~~Credit~~units ~~Facilities~~ and govern the ~~Indenture~~pooling asof ~~well~~oil asand ~~prevailing~~natural ~~oil~~gas ~~prices~~properties. ~~have~~Some ~~given~~states ~~rise~~allow toforced ~~the~~pooling ~~necessity of~~or aintegration ~~debt~~of ~~restructuring.~~tracts Asto afacilitate ~~result~~exploration, ~~Warren~~while ~~elected~~other tostates ~~not~~rely ~~make~~on ~~the~~voluntary ~~approximately~~pooling ~~$7.5 million~~of ~~interest~~lands ~~payment~~and ~~due~~leases. ~~February 1~~In some instances, ~~2016~~forced onpooling ~~its~~or unitization ~~Senior~~may ~~Notes.~~be ~~The~~implemented ~~applicable~~by ~~30-day~~third ~~grace period~~parties ~~for~~and ~~such~~may ~~interest~~reduce ~~payment~~our ~~has~~interest ~~expired,~~in ~~and~~the ~~consequently~~unitized anproperties. ~~event~~In ofaddition, ~~default~~state ~~under~~conservation ~~the~~laws ~~indenture~~establish ~~governing~~maximum ~~such~~rates ~~notes~~of ~~has~~production ~~occurred~~from oil and isnatural ~~continuing.~~gas ~~This~~wells, ~~status~~generally ~~gives~~prohibit the ~~indenture~~venting ~~trustee and~~or ~~the~~flaring ~~holders~~ of ~~not~~natural ~~less~~gas, ~~than~~and ~~25%~~impose inrequirements ~~aggregate~~regarding ~~principal~~the ~~amount~~ratability of ~~the~~production. ~~Senior~~These ~~Notes~~laws ~~the~~and ~~right~~regulations tomay ~~declare~~limit the ~~entire principal~~ amount of ~~the~~natural ~~Senior~~gas ~~Notes plus accrued~~ and ~~unpaid~~oil ~~interest~~we ~~due~~can ~~and payable.~~produce Infrom ~~addition,~~our ~~this~~wells ~~status~~or ~~has~~limit ~~resulted~~the innumber ~~events~~ of ~~default~~wells ~~under~~or ~~Warren's~~the ~~first~~locations ~~lien~~at ~~credit~~which ~~facility~~we can ~~and~~drill. ~~its~~Moreover, ~~second~~each ~~lien~~state ~~credit~~generally ~~facility,~~imposes ~~entitling~~a ~~the~~production ~~administrative~~or ~~agents~~severance ~~and~~tax ~~lead~~with ~~lenders thereunder~~respect to ~~declare all obligations under~~ the ~~Credit~~production ~~Facilities to be immediately due~~ and ~~payable.~~sale ~~However, thus far, no such acceleration~~ of ~~Warrens debt obligations has occurred. Nevertheless~~oil, ~~these~~ ~~debt~~natural ~~instruments~~gas ~~are~~and ~~now~~natural ~~reclassified~~gas ~~from~~liquids ~~long-term~~within ~~liabilities~~its ~~to current liabilities~~jurisdiction.

~~Although Warren~~Natural isGas ~~continuing~~Sales toTransportation. ~~seek~~Historically, afederal ~~workable~~legislation ~~agreement~~and ~~regarding~~regulatory acontrols ~~consensual,~~have ~~out-of-court~~affected ~~restructuring~~the price of ~~its~~the natural ~~indebtedness,~~gas awe ~~failure~~produce toand ~~achieve~~the ~~such~~manner anin ~~agreement~~which ~~will~~we ~~likely necessitate~~market ~~seeking~~our ~~protection~~production. ~~from~~The ~~its~~Federal ~~creditors~~Energy ~~through~~Regulatory aCommission, ~~bankruptcy~~or ~~proceeding~~FERC, has jurisdiction over the transportation and sale or resale of natural gas in ~~order~~interstate tocommerce ~~preserve~~by natural gas companies under the Natural Gas Act of 1938 and ~~maximize~~the ~~value~~Natural ~~for~~Gas ~~its~~Policy ~~stakeholders~~Act of 1978. ~~Furthermore~~Since 1978, ~~Warren~~various ~~and~~federal ~~its~~laws ~~lenders~~have ~~are~~been ~~continuing~~enacted tothat have resulted in the complete removal of all price and non-price controls for ~~evaluate~~sales ~~whether~~of adomestic ~~consensual~~natural ~~restructuring~~gas ~~should~~sold bein ~~effected~~“first ~~outside~~sales”, orwhich ~~through~~includes aall ~~bankruptcy~~of ~~proceeding~~the sales of our production.

FERC also regulates interstate natural gas transportation rates and service conditions, which affects the marketing of the natural gas we produce, as well as the revenues we receive for sales of our natural gas. Commencing in 1985, FERC promulgated a series of orders, Weregulations ~~may~~and ~~not~~rule bemakings ~~able~~that significantly fostered competition in the business of transporting and marketing gas. Today, interstate pipeline companies are required to ~~generate~~provide ~~sufficient~~nondiscriminatory ~~cash~~transportation services to ~~service~~producers, ~~all~~marketers and other shippers, regardless of ~~our~~whether ~~indebtedness~~such shippers are affiliated with an interstate pipeline company. FERC’s initiatives have led to the development of a competitive, ~~and~~unregulated, ~~may~~open beaccess ~~forced~~market for gas purchases and sales that permits all purchasers of gas to ~~take~~buy gas directly from third-party sellers other ~~actions~~than topipelines. ~~satisfy~~However, ~~our~~the ~~obligations~~natural ~~under~~gas ~~our~~industry ~~indebtedness~~historically has been very heavily regulated. Therefore, ~~which~~we ~~may~~cannot ~~not~~guarantee bethat ~~successful~~the less stringent regulatory approach recently pursued by FERC and Congress will continue indefinitely into the future, nor can we determine what effect, if any, future regulatory changes might have on our natural gas related activities.

~~Our~~Under ~~ability~~FERC’s tocurrent ~~make~~regulatory ~~scheduled~~regime, ~~payments~~transmission onservices ormust tobe ~~refinance~~provided ~~our debt obligations depends~~ on ~~our~~an ~~financial position~~open-access, ~~results of operations~~ ~~and~~non-discriminatory ~~cash~~basis ~~flows,~~at ~~which~~cost-based isrates ~~subject~~or toat ~~prevailing~~market-based ~~economic~~rates ~~and~~if ~~competitive~~the ~~conditions,~~transportation ~~our~~market ~~ability~~at toissue ~~renegotiate~~is ~~terms,~~sufficiently ~~and~~competitive. toGathering ~~certain financial~~services, ~~business~~which ~~and~~occur ~~other~~upstream ~~factors beyond our control. In light~~ of ~~prevailing~~jurisdictional ~~oil prices and the necessity of a debt restructuring~~transmission services, ~~Warren~~are ~~elected~~regulated toby ~~not~~state ~~make the approximately $7~~agencies.~~5 million~~ ~~interest~~Although ~~payment due February 1, 2016 on~~ its ~~Senior~~policy ~~Notes. The~~is ~~applicable~~still ~~30-day~~in ~~grace~~flux, ~~period~~FERC ~~for~~recently ~~such interest payment~~ has ~~expired,~~reclassified ~~and~~certain ~~consequently~~jurisdictional antransmission ~~event~~facilities ofas ~~default~~non-jurisdictional ~~under~~gathering ~~the~~facilities, ~~indenture governing such notes~~ which has ~~occurred and is continuing. This status gives~~ the ~~indenture~~tendency ~~trustee~~to ~~and~~increase ~~the~~our ~~holders~~costs of ~~not~~transporting ~~less~~gas ~~than~~to ~~25% in aggregate principal amount~~ point-of-sale ~~the Senior Notes the right declare the entire principal amount of the Senior Notes plus accrued and unpaid interest due and payable~~locations. ~~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~~

39Permits. Our operations are subject to various federal, state and local laws and regulations that include requiring permits for the drilling and operation of wells, maintaining bonding and insurance requirements to drill, operate, plug and abandon wells, restoring the surface associated with our wells; and regulating the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, the plugging and abandonment of wells, the disposal of fluids and solids used in connection with our operations, and air emissions associated with our operations. Also, we have permits from numerous jurisdictions to operate crude oil, natural gas and related pipelines and equipment within the boundaries of these governmental jurisdictions. The permits required for various aspects of our operations are subject to enforcement for noncompliance, as well as revocation, modification and renewal by issuing authorities.

~~Table~~Operations ofon ~~Contents~~Federal Oil and Gas Leases

~~administrative~~We conduct a sizeable portion of our operations on federal oil and natural gas leases which are administered by the BLM and the ~~agents~~Minerals Management Service (“MMS”). Federal leases contain relatively standard terms and ~~lead~~require ~~lenders~~compliance ~~thereunder~~with detailed BLM and MMS regulations and orders, which are subject to ~~declare~~change. ~~all~~Under ~~obligations~~certain ~~under~~circumstances, the ~~Credit~~BLM ~~Facilities~~may require any of our operations on federal leases to be ~~immediately~~suspended, ~~due~~curtailed ~~and~~or ~~payable~~terminated. ~~However,~~Any ~~thus~~such ~~far~~suspension or termination could have a material adverse effect on our business, nofinancial ~~such~~condition ~~acceleration~~and results of ~~Warren's~~operations. ~~debt~~The MMS issued a final rule ~~obligations~~that ~~has~~amended ~~occurred~~its regulations governing the valuation of oil and gas produced from federal leases. ~~Nevertheless~~This rule, ~~these~~which ~~debt~~became ~~instruments~~effective ~~are~~June 1, ~~now~~2000, ~~reclassified~~provides ~~from~~that ~~long-term~~the ~~liabilities~~MMS towill ~~current~~collect ~~liabilities~~royalties based on the market value of oil and gas produced from federal leases.

~~Although Warren~~State isRegulation 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.

Our ~~proved~~operations ~~reserves~~ are ~~estimates~~also ~~based~~subject onto ~~many~~regulation ~~assumptions~~at ~~that~~the ~~may~~state, ~~turn~~and ~~out~~in tosome becases, ~~inaccurate~~county, municipal and local governmental levels. ~~Any~~Such regulation ~~material~~includes ~~inaccuracies~~requirements concerning permits for the drilling of wells, maintaining bonding requirements in ~~these~~order ~~reserve~~to ~~estimates~~drill or ~~underlying~~operate ~~assumptions~~wells, ~~will~~the ~~materially~~location ~~affect~~of wells, the ~~quantities~~method of drilling and ~~present~~casing ~~value~~wells, ofthe ~~our~~surface ~~reserves.~~ use and restoration of properties

No25 one can measure underground accumulations of oil and natural gas in an exact way. There are numerous uncertainties inherent in estimating quantities of hydrocarbon reserves, including many factors beyond our control that could cause the quantities and present value of our reserves to be overstated or understated. Oil and natural gas reserve engineering requires subjective estimates of underground accumulations of oil and natural gas and assumptions concerning future oil and natural gas prices, production levels, operating and development costs, drilling expenses, severance and excise taxes, capital expenditures, ownership and title matters, taxes and the availability of funds. The engineering process of estimating oil and natural gas reserves is complex and is not an exact science. It requires interpretations of available geological, geophysical, engineering and economic data for each reservoir. Therefore, these estimates are inherently imprecise.

Estimates ofTable reserves based on risk of recovery and estimates of expected timing and future net cash flows prepared or audited by different engineers, or by the same engineers at different times, may vary substantially. Because of the subjective nature of oil and natural gas reserve estimates, each of the following items may differ materially from the amounts or other factors estimated:Contents

Over time,Index our independent petroleum engineering consultants may make material changes to reserveFinancial estimates by taking into account the results of actual drilling, testing, and production. Further, the potential for future reserve revisions, either upward or downward, is significantly greater than normal because a significant portion of our potential reserves are undeveloped. Statements

In ~~accordance~~upon ~~with~~which ~~SEC~~wells ~~requirements~~are drilled, ~~our~~the ~~estimates~~plugging ofand ~~proved~~abandonment ~~reserves~~of ~~for~~wells, ~~2015~~and ~~were determined based on a historical 12-month average price as of~~ the ~~first~~disposal ~~day~~ of ~~each~~fluids ~~month~~used ~~during the fiscal year. In a given year, actual prices~~ and ~~costs~~produced ~~may~~in beconnection ~~materially~~with ~~higher~~operations. orOur ~~lower~~operations ~~than~~are ~~those~~also ~~used~~subject to ~~calculate~~various conservation ~~our~~laws ~~estimated proved reserves. Significant variance from these prices~~ and ~~costs could~~regulations ~~greatly~~pertaining ~~affect~~to ~~our~~the ~~estimates~~size of ~~reserves. In addition~~drilling, ~~proved~~spacing ~~undeveloped~~and ~~reserves~~proration ~~locations~~units ~~may~~and bethe ~~limited~~unitization toor ~~those~~pooling ~~scheduled~~of tooil beand ~~drilled~~gas ~~within the next five years~~properties.

40In California, as part of our waterflood development plan for the WTU and NWU, over the next 7 years, we will require 20 to 30 water injection well approvals from the California DOGGR. In recent years, the DOGGR has timely reviewed and approved our applications for injection permits. Should DOGGR delay the review process or deny our applications for future water injection wells, our ability to develop the WTU and NWU may be compromised.

The Wyoming Department of Environmental Quality, or Wyoming DEQ, has restrictive regulations applicable to the surface disposal of water produced from our CBM drilling operations. We typically are required to obtain Clean Water Act, Safe Drinking Water Act and analogous state and local permits to use surface discharge methods, such as settling ponds, to dispose of water when the groundwater produced from the coal seams will not exceed surface discharge permit limitations. Surface disposal options have volumetric limitations and require an extensive third-party water sampling and laboratory analysis program to ensure compliance with state permit standards. Alternative disposal methods to surface disposal of water are more expensive. These alternatives include installing and operating water treatment facilities or drilling disposal wells to inject the produced water in the underground formations below the coal seams or lower sandstone horizons. Injection wells are regulated by the Wyoming DEQ, the Wyoming Oil & Gas Conservation ~~Table~~Commission and the BLM, and permits to drill these wells are obtained from these agencies. Based on our experience with CBM production, we believe that permits for surface discharge of ~~Contents~~produced water in the Washakie Basin have become and will continue to be difficult to obtain. As a result, in Wyoming, our produced water is currently re-injected into water disposal wells.

AsIn the areas of ~~December 31,~~Pennsylvania ~~2015~~where ~~and~~we ~~2014~~operate, ~~approximately~~water ~~20%~~sourcing and ~~41%,~~wastewater ~~respectively,~~disposal ofare ~~our~~regulated ~~estimated~~both ~~net~~by ~~proved~~the ~~reserves~~Pennsylvania ~~were~~Department ~~undeveloped.~~of Environmental ~~Undeveloped reserves~~Protection, ~~by their~~or ~~nature~~PADEP, ~~are~~as ~~less~~well ~~certain~~as the Susquehanna River Basin Commission, or SRBC. ~~Recovery~~The ofSRBC ~~undeveloped~~is ~~reserves~~a ~~requires~~federal ~~significant~~interstate ~~capital~~watershed ~~expenditures~~agency ~~and~~that ~~successful~~oversees ~~drilling~~the ~~operations.~~withdrawal ~~Additionally,~~and asuse ~~oil~~of surface water and groundwater from the Susquehanna River Basin for natural gas ~~commodity~~development ~~prices become~~and ~~lower,~~regulates ~~the~~interbasin ~~quantity~~transfers of ~~economically~~produced ~~recoverable~~fluids. ~~proved~~The ~~reserves~~SRBC ~~declines~~also restricts water withdrawal rates during periods of reduced precipitation to avoid adverse impacts to the water resources within the Susquehanna River Basin. The ~~reserve~~PADEP ~~data~~implements ~~assumes~~a statewide program governing all aspects of natural gas development. This program includes a requirement that weoperators ~~will~~submit ~~make~~a ~~significant~~water ~~capital~~management ~~expenditures~~plan tofor ~~develop~~DEP ~~our~~approval ~~reserves.~~prior Weto ~~have~~the ~~prepared estimates~~issuance of ~~our~~drilling ~~oil~~permits. The PADEP imposes extensive operational and ~~natural~~design ~~gas~~standards ~~reserves~~on impoundments and ~~the~~pits ~~costs~~that store freshwater or produced water associated with ~~these~~natural ~~reserves~~gas development. Discharges of produced water to streams in ~~accordance~~Pennsylvania ~~with~~are ~~industry~~prohibited ~~standards~~unless strict effluent limits are achieved. ~~However~~The EPA, rather than DEP administers the ~~estimated~~injection ~~costs~~well ~~may~~program ~~not~~in bePennsylvania. ~~accurate,~~Very ~~development~~few ~~may~~injection ~~not occur~~wells ashave ~~scheduled~~been permitted in Pennsylvania to accept produced water from unconventional wells. In December of 2013, orthe PADEP proposed additional regulations governing the ~~actual~~permitting ~~results~~and ~~may~~operation ~~not~~of benatural asgas ~~estimated~~wells. WeThese ~~may~~regulations, ~~not~~if ~~have~~promulgated as proposed, orare belikely ~~able~~to increase significantly the costs to ~~obtain~~dispose of produced water, ~~the~~which ~~capital~~could wehave ~~need~~a material toadverse ~~develop~~effect ~~these~~on ~~proved~~our ~~reserves~~business, financial condition and results of operations.

~~Actual oil~~In ~~and natural gas prices~~addition, ~~future~~state ~~production,~~conservation ~~revenues~~laws, ~~operating~~which frequently ~~expenses,~~establish ~~taxes,~~maximum ~~development~~rates ~~expenditures and quantities~~ of ~~recoverable~~production from oil and ~~natural~~ gas ~~reserves~~wells, ~~will~~generally ~~most likely~~prohibit, ~~vary~~restrict ~~from~~or ~~those~~regulate ~~estimated. Any significant variance could materially affect~~ the ~~estimated~~venting ~~quantities~~or ~~and~~flaring ~~present value~~ of ~~future~~gas ~~net~~and ~~revenues~~impose ~~set~~certain ~~forth~~requirements inregarding ~~this~~the ~~annual~~rates ~~report~~of ~~on Form 10-K~~production. AState ~~further~~regulation ~~reduction~~of ingathering facilities ~~oil~~generally ~~and~~includes ~~natural~~various ~~gas prices~~safety, ~~for~~environmental ~~example~~and, ~~would~~in ~~reduce~~some ~~the~~circumstances, ~~value~~nondiscriminatory oftake ~~proved~~requirements, ~~reserves~~but, ~~and~~except ~~reduce~~as ~~the~~noted ~~amount of oil and natural gas that could be economically produced~~above, ~~thereby~~does ~~reducing~~not ~~the~~generally ~~quantity~~entail ofrate ~~reserves~~regulation. WeThese ~~may~~regulatory ~~adjust~~burdens ~~estimates~~may ofaffect ~~proved reserves to reflect production history~~our profitability, ~~results of exploration~~ and ~~development,~~ ~~prevailing~~we ~~oil~~are ~~and~~unable ~~natural~~to ~~gas~~predict ~~prices~~the ~~and~~future ~~other~~cost ~~factors,~~or ~~many~~impact of ~~which~~complying ~~are~~with ~~beyond~~such ~~our control~~regulations.

~~You should~~Future ~~not~~Regulations assume that the present value of future net revenues referred to in this annual report on Form 10-K is the current market value of our estimated oil and natural gas reserves. The Standardized Measure is a reporting convention that provides a common basis for comparing oil and natural gas companies subject to the rules and regulations of the SEC. Our non-GAAP financial measure, PV-10 Value, is a similar reporting convention that we have disclosed in this annual report on Form 10-K. In accordance with SEC requirements, the standardized measure of estimated discounted future net cash flows from proved reserves are generally based on average twelve-month prices and costs as of the first day of each month during the fiscal year. Actual future prices and costs may be materially higher or lower than such prices and costs. Any change in consumption by oil and natural gas purchasers or in governmental regulations or taxation will also affect actual future net cash flows. The timing of both the production and the expenses for the development and production of our oil and natural gas properties will affect the timing of actual future net cash flows from proved reserves and their present value. In addition, the 10% discount factor, which is required by the SEC to be used in calculating discounted future net cash flows for reporting purposes, is not necessarily the most appropriate discount factor, nor does it reflect discount factors used in the marketplace for the purchase and sale of oil and natural gas properties. Conditions in the oil and natural gas industry and oil and natural gas prices will affect whether the 10% discount factor accurately reflects the market value of our estimated reserves.

Proposals and proceedings that may affect the oil and gas industry are pending before Congress, BLM, FERC, MMS, state legislatures and commissions, and the courts. We cannot predict when or whether any such proposals may become effective. In the past, the natural gas industry has been heavily regulated. There is no assurance that the regulatory approach currently pursued by various agencies will continue indefinitely. Notwithstanding the foregoing, we do not beanticipate ~~able~~that tocompliance ~~drill~~with ~~wells~~existing onfederal, state and local laws, rules and regulations will have a ~~substantial~~material ~~portion~~adverse ofeffect on our ~~acreage~~capital expenditures, earnings or competitive position.

WeFailure ~~may~~to ~~not~~comply bewith ~~able~~environmental toregulations ~~drill~~may onresult ain ~~substantial~~the ~~portion~~imposition of ~~our~~substantial ~~acreage~~administrative, ~~for~~civil or ~~various~~criminal ~~reasons.~~penalties, Weor ~~may~~restrict ~~not generate~~ or beprohibit ~~able~~our todesired ~~raise sufficient~~business ~~capital to do so~~activities. ~~Deterioration~~Environmental inlaws ~~commodity prices may also make drilling some acreage uneconomic. Our actual drilling activities~~ and ~~future~~regulations ~~drilling~~impose ~~budget will depend on drilling results~~liability, ~~oil~~sometimes ~~and~~strict ~~natural gas prices~~liability, ~~the~~for ~~availability~~environmental ~~and~~cleanup ~~cost of capital, drilling and production~~ costs, ~~availability of drilling services~~ and ~~equipment,~~other ~~lease~~damages. ~~expirations,~~Other ~~gathering~~environmental ~~system~~laws and ~~pipeline~~regulations ~~transportation~~may ~~constraints,~~delay ~~regulatory~~or ~~approvals~~prohibit exploration and ~~other~~production ~~factors. In addition, any drilling~~ activities wein ~~are~~environmentally ~~able~~sensitive toareas ~~conduct may not be successful~~ or ~~add~~impose additional ~~proved~~costs ~~reserves to our overall proved reserves, which could have a material adverse effect~~ on ~~our~~these ~~future business, financial condition and results of operations~~activities.

41We believe we are in compliance with current applicable environmental laws and regulations. We believe the existence and enforcement of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in

~~Table~~26 ~~of Contents~~

WeTable are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of doing business. Contents

OurIndex exploration, development, production and marketing operations are regulated extensively at the federal, state and local levels. Under these laws and regulations, we could be held liable for personal injuries, property damage (including site clean-up and restoration costs), and other damages. Failure to complyFinancial with these laws and regulations may also result in the suspension or termination of our operations, or subject us to administrative, civil and criminal penalties and damages. Statements

~~Environmental~~ ~~and~~the ~~other~~energy ~~governmental~~industry. ~~laws~~Costs ~~and~~associated ~~regulations~~with ~~also~~responding ~~increase the costs~~ to ~~plan,~~a ~~permit,~~major ~~design,~~spill ~~drill,~~of ~~install,~~crude ~~operate and abandon~~ oil ~~and~~or ~~natural~~produced ~~gas wells. Moreover~~water, ~~public interest~~or incosts ~~environmental~~associated ~~protection~~with ~~has~~remediation ~~increased~~of ~~in recent years, and~~ environmental ~~organizations have opposed~~contamination, ~~with some success, certain drilling projects. Compliance costs~~ are ~~significant.~~the ~~The~~most likely ~~exploration~~occurrences ~~and production of oil and gas involves many risks concerning equipment and human operational problems~~ that could ~~lead~~result toin ~~leaks~~a ormaterial ~~spills~~adverse ofeffect ~~petroleum~~on ~~products.~~our ~~These laws and regulations~~business, ~~particularly~~ infinancial ~~California,~~condition ~~Pennsylvania~~ and ~~Wyoming,~~results ~~are~~of ~~extensive,~~operations. ~~involve~~There ~~severe~~are ~~penalties~~no ~~and~~pending ~~could~~or ~~change~~threatened inclaims ~~ways~~for ~~that~~any ~~substantially~~such ~~increase~~environmental ~~our~~cleanup costs, and ~~associated~~we ~~liabilities.~~operate Asour aproducing ~~result,~~properties in ~~there~~a ~~can~~prudent bemanner noin ~~assurance~~order ~~that~~to ~~our~~avoid ~~anticipated production levels will be realized~~ or ~~that~~minimize ~~our~~liability ~~estimates~~related ofto ~~proved~~any ~~reserves~~such ~~will not be negatively impacted~~claims.

~~Part of~~Changes ~~the regulatory environment~~ in ~~which~~applicable ~~we operate includes~~federal, instate ~~some~~and ~~cases,~~local environmental ~~federal~~laws and ~~state~~regulations ~~requirements~~potentially ~~for~~could ~~performing~~have ora ~~preparing~~material ~~EAs,~~adverse ~~EISs,~~effect ~~studies,~~on ~~reports~~our ~~and/or~~business, ~~plans~~financial ~~of development~~condition ~~before commencing exploration~~ and ~~production~~results ~~activities~~of operations. ~~These~~In ~~regulations~~this ~~may~~regard, ~~impose~~our ~~significant~~CBM ~~costs~~drilling and ~~delays~~production onoperations ~~our~~are ~~operations~~subject ~~and,~~to asongoing aBLM ~~result~~oversight, ~~may~~EIS requirements ~~hinder~~and orrecurring ~~limit~~BLM ~~the~~approvals, ~~quantity of oil~~ and ~~natural~~could ~~gas~~be weaffected ~~may~~by ~~ultimately~~changes bein ~~able~~BLM toregulations ~~produce~~or ~~and sell~~policies.

~~A major~~We ~~risk~~anticipate ~~inherent~~no inmaterial capital ~~our~~expenditures ~~drilling plans is the need~~ to ~~obtain~~comply ~~drilling~~with ~~permits from applicable~~ federal, ~~state~~ and ~~local~~state ~~authorities~~environmental requirements. ~~Delays~~In inaddition, ~~obtaining~~state-wide ~~regulatory~~reclamation ~~approvals~~bonds ~~or drilling~~and ~~permits~~our ~~for~~$50 million ~~producing~~casualty and ~~water~~environmental ~~injection~~insurance ~~wells,~~policy ~~the~~have ~~failure~~been adequate to ~~obtain~~meet ~~a drilling permit for a well, or~~ the ~~receipt~~applicable ofbonding ~~a permit with excessive conditions or costs could have a material~~and ~~adverse~~insurance ~~effect~~requirements ~~on our ability~~ to ~~explore or develop our properties~~date. Additionally, ~~the~~we ~~oil~~have ~~and~~deposited ~~natural~~$2.9 million ~~gas regulatory environment could change~~ in ~~ways~~money ~~that~~market ~~might~~securities ~~substantially~~as ~~increase the financial and managerial costs to comply with the requirements~~ of ~~these laws and regulations and~~December 31, ~~consequently~~2016, ~~adversely~~as ~~affect~~collateral ~~our~~for ~~profitability. Furthermore, we may be put at~~ a ~~competitive disadvantage to larger companies in our industry that can spread these additional costs over a greater number of wells and larger operating area~~$3.2 million ~~Any~~reclamation orbond ~~all of these contingencies could delay or halt our drilling activities or the construction of ancillary facilities necessary~~ for ~~production, which would prevent us from developing our property interests as planned. Conditions, delays or restrictions imposed on~~ the ~~management~~Wilmington ofTownlot ~~groundwater produced during drilling could severely limit our operations or make them uneconomic~~Unit.

~~We cannot~~Coalbed beMethane ~~certain~~Operations. The majority of our gas production is from CBM operations that ~~existing~~generate ~~laws~~water ordischarges ~~regulations,~~and asair emissions ~~currently~~that ~~interpreted~~are orsubject ~~reinterpreted~~to insignificant regulatory control. Naturally occurring groundwater is produced by our CBM operations. This produced water is disposed of by injection into the ~~future,~~subsurface through disposal or ~~future~~water ~~laws~~injection wells, and, in some cases, discharge to the surface or ~~regulations~~in ~~will~~evaporation ~~not~~ponds. ~~harm~~Whichever ~~our~~disposal ~~business~~method is used, ~~results~~produced water must be disposed of ~~operations~~ in compliance with permits issued by state and ~~financial~~federal regulatory agencies, and in compliance with applicable state, ~~condition~~federal and local environmental regulations. ~~Our~~To ~~operations~~date, ~~are~~we ~~subject~~have been able to ~~regulation~~obtain necessary surface discharge or disposal well permits, and ~~permitting~~we have been able to discharge produced water and operate our produced water disposal wells in ~~various~~compliance with ~~aspects,~~our ~~including~~permits and applicable federal, ~~but~~state ~~not~~and ~~limited~~local laws and regulations without undue cost or burden to: our business activities.

42Our CBM operations involve the use of gas-fired generators and compressors to transport the gas we produce. Emissions of nitrogen oxides and other combustion by-products from individual or multiple generators and compressors at one location may be great enough to subject the compressors to state air quality requirements for pre-construction and operating permits. To date, we have not experienced significant delays or problems in obtaining the required air permits and have been able to operate these compressors in compliance with our permits and applicable federal, state and local laws and regulations without undue cost or burden to our business activities. Another air emission associated with our coalbed methane operations that may be subject to regulation and permitting requirements is particulate matter resulting from construction activities and vehicle traffic.

~~Table~~Atlantic Rim. In May 2007, the BLM issued its Record of ~~Contents~~Decision for the Atlantic Rim EIS that allows the development of the Atlantic Rim project by drilling up to 2,000 wells, 1,800 of which are CBM wells and 200 of which are deeper conventional wells. Based on the current knowledge of geologic formations, the BLM’s minimum well spacing will be 80 acres per CBM well. Our Washakie Basin CBM production operations are also subject to Wyoming Department of Environmental Quality, or DEQ, regulations and permit requirements. Permits required from the Wyoming DEQ include air emission and produced water discharge permits. To date, we have not experienced any difficulties in obtaining any air permits needed for our Washakie Basin operations from the Wyoming DEQ. Disposal of produced water is limited to subsurface injection in the portion of the Washakie Basin within the Colorado River drainage area. We have received permits for a sufficient number of water injection wells in the Atlantic Rim project; however, we will need to obtain permits for additional injection wells, in the event we need additional subsurface disposal capacity.

~~Under~~Wilmington Field. The Wilmington Townlot Unit, or WTU, and the North Wilmington Unit, or NWU, are located in a mixed industrial ~~these~~and ~~laws~~residential area near the Port of Los Angeles, California. Field activities include drilling wells to develop our lease acreage and operating a waterflood to maximize crude oil production. Stringent environmental regulations, werestrictive permit conditions and the possibility of permit denials from a multiplicity of state, regional and local regulatory agencies may inhibit, curtail or add cost to future Wilmington field development activities. Despite prudent operation and preventative measures, drilling, waterflooding and production operations may result in spills and other accidental releases of produced water, hydrocarbons or injection fluids. Remediation and associated costs for a release of produced water, hydrocarbons or injection fluids in an urban environment could be ~~liable~~significant. ~~for:~~This potential liability is accentuated by the location of our WTU and NWU leases in or near residential areas, and being within a historically active oil field.

~~See "Item 1:~~Operating ~~Business—Regulations~~Hazards and ~~Environmental~~Insurance ~~Matters" for a more detailed discussion of laws and regulations affecting our operations.~~

The oil ~~Federal,~~and ~~state~~natural ~~and~~gas ~~local~~business ~~legislative~~involves ~~and~~a ~~regulatory~~variety ~~initiatives~~of ~~relating~~operating torisks, ~~hydraulic~~including ~~fracturing~~fires, ~~as well~~explosions, asblowouts, ~~governmental~~environmental ~~reviews~~hazards, spills or releases of ~~such~~crude ~~activities~~oil, ~~could~~produced ~~result~~water inand ~~increased~~injection ~~costs~~fluids, and ~~additional~~other ~~operating~~potential ~~restrictions~~events orwhich ~~delays~~could inhave ~~the~~a material ~~completion~~adverse ofeffect ~~oil~~on ~~and~~our ~~natural~~business, ~~gas~~financial ~~wells~~condition and results of operations. Any of these problems could adversely affect our ability to conduct operations and cause us to incur substantial losses. Such losses could reduce or eliminate the funds available for exploration, production or leasehold acquisitions, or result in the loss of certain properties.

~~Some~~27 of our completion activities and our operations in Pennsylvania involve the use of hydraulic fracturing, which is an important and common process that creates a fracture extending from the well bore in a rock formation to enable oil or natural gas to move more easily through the rock pores to a production well. Fractures are typically created through the injection of water, sand or alternative proppant and chemicals under pressure into target geological formations to fracture the surrounding rock and stimulate production. We regularly use hydraulic fracturing as part of our operations in Pennsylvania. In California, our completion activities do not involve hydraulic fracturing, but do involve other technologies. Presently, hydraulic fracturing is regulated primarily at the state level, typically by state oil and natural gas commissions and similar agencies, however, legislative and regulatory efforts at the federal, state and local government level where we operate have been made to render permitting and compliance requirements more stringent for hydraulic fracturing and other technologies used to increase production. For example, the City of Los Angeles is currently considering whether to amend its zoning code to restrict or prohibit hydraulic fracturing and other completion activities. This and

43Table of Contents

TableIndex ofto ContentsFinancial Statements

~~similar~~In accordance with industry practice, we maintain insurance against some, but not all, potential ~~proposals~~risks and losses. We do not carry business interruption insurance. For some risks, we may elect not to obtain insurance if ~~adopted,~~we ~~would~~believe ~~likely~~the ~~increase~~cost ~~our~~of ~~costs~~available ~~and~~insurance ~~make~~is itexcessive ~~more~~relative ~~difficult~~to the risks presented. In addition, pollution and environmental risks generally are not fully insurable at a reasonable cost. If a significant accident or ~~impossible~~other event occurs and is not fully covered by insurance, toit ~~pursue~~could ~~some~~have ofa material adverse effect on our ~~development~~business, ~~projects~~financial condition and results of operations.

~~In addition,~~Title ~~with increased public concern regarding the potential for hydraulic fracturing~~ to ~~adversely~~Properties affect drinking water supplies, proposals have been made to enact federal, state and local legislation and regulations that would increase the regulatory burden imposed on hydraulic fracturing. For example, the U.S. Environmental Protection Agency, or the EPA, has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act, or SDWA, over certain hydraulic fracturing activities involving the use of diesel fuels. The Safe Drinking Water Act regulates the underground injection of substances through the Underground Injection Control ("UIC") program and exempts hydraulic fracturing from the definition of "underground injection". However, Congress has from time to time considered legislation that would amend the SDWA to repeal the exemption for hydraulic fracturing from the definition of "underground injection" and require federal permitting and regulatory control of hydraulic fracturing, as well as require disclosure of the chemical constituents of the fluids used in the fracturing process. The U.S. Congress may consider similar SDWA legislation in the future.

In ~~February~~ ~~2014~~most situations, ~~the~~as ~~EPA~~is ~~asserted~~customary ~~federal~~in ~~regulatory authority under~~ the ~~SDWA's~~oil ~~UIC~~and ~~program~~gas ~~over hydraulic fracturing involving diesel additives~~industry, ~~and~~only ~~requested comments in May 2014 on~~ a ~~proposal~~ topreliminary ~~require~~title ~~disclosure~~examination ofis ~~chemical~~conducted ~~ingredients~~at ~~in hydraulic fracturing fluids under~~ the ~~Toxic~~time ~~Substances~~we ~~Control~~acquire ~~Act. Because the EPA's Advanced Notice of Proposed Rulemaking did not propose~~oil ~~any~~and ~~actual~~gas ~~regulation,~~leases itcovering isproperties ~~unclear~~for ~~how~~possible ~~any~~drilling ~~federal disclosure requirements that add to any applicable state disclosure requirements already in effect may affect our~~ operations. ~~Further,~~Prior ~~on October 21,~~to ~~2011,~~ the ~~EPA~~commencement ~~announced~~of ~~its~~drilling ~~intention to propose federal Clean Water Act regulations governing wastewater discharges from hydraulic fracturing and certain other natural gas~~ operations, ~~but~~a ~~has~~more ~~not~~complete ~~yet~~title ~~proposed~~examination ~~any~~of ~~such~~the ~~regulations.~~drill Insite ~~addition,~~tract ~~the~~is ~~U.S.~~usually ~~Department~~conducted ofby ~~the~~independent ~~Interior~~attorneys ~~published~~or ~~final~~landmen, ~~rules~~or in ~~March~~the case of ~~2015~~an ~~that update~~ existing ~~regulation of hydraulic fracturing activities on federal and Indian lands~~unit, ~~including~~historical ~~requirements~~title ~~for~~examinations ~~chemical~~are ~~disclosure,~~relied ~~well~~upon ~~bore~~to ~~integrity~~some ~~and handling of flowback water~~extent. ~~Studies~~Once byproduction ~~the~~from ~~EPA~~a ~~and~~given ~~other~~well ~~federal~~is ~~agencies~~established, ~~are underway~~we ~~that~~prepare ~~focus~~a ontitle ~~the~~or ~~environmental~~division ~~aspects~~ of ~~hydraulic~~interest ~~fracturing~~report ~~activities.~~indicating ~~The~~the ~~draft~~proper ~~assessment~~parties ~~of potential impacts of hydraulic fracturing for oil~~ and ~~gas~~percentages ~~on drinking water resources was released~~ for ~~public~~payment ~~comment in June~~ of production ~~2015.~~proceeds, ~~These~~including ~~studies could spur further regulation~~royalties. ~~Additional~~The ~~regulations~~level ~~adopted~~of attitle ~~the~~examination ~~federal~~often ordiffers ~~state~~from ~~level~~property ~~could~~to ~~result in permitting delays and cost increases~~property.

~~Along with~~Our ~~several~~properties ~~other states, Pennsylvania has adopted laws and proposed regulations that require oil and natural gas operators to disclose chemical ingredients and water volumes used~~are tosubject ~~hydraulically fracture wells, in addition~~ to ~~more~~customary ~~stringent~~royalty ~~well construction and monitoring requirements. The chemical ingredient information is generally available to the public via online databases~~interests, ~~and this may bring more public scrutiny to hydraulic fracturing operations. In addition~~provisions, ~~local~~liens ~~governments~~incident may also adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular or prohibit the performance of well drilling in general or hydraulic fracturing, in particular. In Pennsylvania, although the legislature passed legislation to ~~make~~operating ~~regulation of drilling uniform throughout the state~~agreements, ~~the~~liens ~~Pennsylvania~~for ~~Supreme~~current ~~Court~~taxes ~~in Robinson Township v. Commonwealth of Pennsylvania struck down portions of that legislation. Following this decision, local governments in Pennsylvania may adopt ordinances regulating drilling~~ and ~~hydraulic~~other ~~fracturing~~burdens ~~activities~~which, ~~especially~~on ~~within~~an ~~residential~~individual ~~areas.~~lease ~~If new or more stringent federal~~basis, ~~state,~~ ~~or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where~~ we ~~operate,~~believe wedo ~~could~~not ~~incur~~materially ~~potentially~~interfere ~~significant added costs to comply~~ with ~~such requirements,~~the ~~experience~~use ~~delays~~of or ~~curtailment~~affect in the ~~pursuit~~carrying value of ~~exploration,~~our ~~development, or production activities, and perhaps even be precluded from drilling wells~~properties.

44Employees

~~Table~~At December 31, 2016, we had 66 full-time employees. We believe that our relationships with our employees are good. None of ~~Contents~~our employees are covered by a collective bargaining agreement. From time to time, we use the services of independent consultants to perform various professional services, particularly in the areas of geological, permitting and EA activities. Independent contractors often perform well drilling and production operations, including pumping, maintenance, dispatching, inspection and testing.

Offices ~~Our derivatives activities could result in financial losses or could reduce our income.~~

InOur ~~order~~principal toexecutive ~~achieve~~office ais ~~more~~located ~~predictable~~at ~~cash~~Two ~~flow~~Lincoln Centre, ~~reduce~~5420 LBJ Freeway, Suite 600, Dallas, TX 75240, and our ~~exposure~~telephone number tois ~~adverse~~(214) 393-9688. ~~fluctuations~~We inlease ~~the~~approximately ~~prices~~11,832 square feet of office space for our Dallas, TX office under a lease that expires in April 2022. Our oil and ~~natural~~ gas operations office in Casper, ~~and~~Wyoming ~~comply~~occupies ~~with~~1,174 square ~~credit~~feet ~~agreement~~under ~~requirements,~~a welease that expired in October 2014 and is currently, month to month. Our oil and ~~may~~gas operations office in ~~the~~Long ~~future~~Beach, ~~enter~~California ~~into~~occupies ~~financial~~3,326 square ~~derivatives~~feet ~~contracts~~of ~~affecting~~space under a ~~portion~~lease ofthat expires in November 2018. We lease additional space for our ~~oil~~other ~~and~~office ~~natural~~located ~~gas~~in ~~production.~~Denver, ~~Financial derivatives~~CO ~~contracts~~which ~~expose~~occupies us4,507 square feet and is currently month to ~~the~~month. ~~risk~~We ofalso ~~financial~~have ~~loss~~field offices in ~~some~~Tunkhannock, ~~circumstances~~Pennsylvania, ~~including~~Wilmington, ~~when:~~California and Rawlins, Wyoming. We believe that our facilities are adequate for our current operations.

InOur website address is http://www.warrenresources.com. We make ~~addition~~available free of charge through our website our annual report on Form 10-K, ~~these~~quarterly ~~types~~reports ofon ~~derivatives~~Form 10-Q, ~~arrangements~~current ~~limit~~reports ~~the~~on Form 8-K, ~~benefit~~and weall ~~would~~amendments ~~receive~~to ~~from~~those ~~increases~~reports inas soon as reasonably practicable after such material is electronically filed with or furnished to the ~~prices~~SEC ~~for~~at ~~oil~~http://www.sec.gov. Additionally, our Code of Business Conduct and ~~natural~~Ethics, ~~gas~~which includes our code of ethics for ~~the~~senior ~~production~~financial ~~affected~~management, byCorporate Governance Guidelines and the ~~financial derivatives~~charters ~~contracts~~of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website and ~~may~~are ~~expose~~available usin print free of charge to ~~cash~~any ~~margin~~stockholder ~~requirements~~who orrequests ~~increased~~them. ~~demands~~Requests ~~for~~should ~~collateral~~be ~~from~~sent by mail to our ~~counterparties~~corporate secretary at our principal office at Two Lincoln Centre, 5420 LBJ Freeway, Suite 600, Dallas, TX 75240. Information contained on, or connected to, ~~such~~our ~~contracts~~website is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.

~~Financial uncertainties~~Item in the broader economy as a whole may increase the risk that a counterparty may default on its obligations, as was demonstrated by the recent sub-prime mortgage losses incurred by many banks and other financial institutions (and which prompted the U1A.S. ~~Congress~~Risk to attempt to mitigate such risks in the future through the Dodd-Frank Act). Such losses, if they occur, may affect the ability of the counterparties to meet their obligations to us on derivatives transactions, which would reduce our revenues from derivatives at a time when we are also receiving a lower price for our oil and natural gas sales. As a result, our financial condition could be materially or adversely affected. In addition, any event of default may trigger a termination of our swaps, which could result in us incurring substantial liability. Factors

We ~~have~~ ~~elected~~are ~~not~~a tosmaller ~~designate~~reporting ~~our~~company ~~commodity derivatives~~ as ~~cash~~defined ~~flow~~in ~~hedges~~Rule 12b-2 ~~for~~of ~~accounting~~the ~~purposes.~~Exchange ~~Accordingly~~Act; therefore, ~~such~~pursuant ~~contracts~~to ~~are~~Regulation S-K, ~~recorded~~we ~~at fair value on our Consolidated Balance Sheet and changes in fair value~~ are ~~recorded~~not inrequired ~~the~~to ~~Consolidated~~make ~~Statements~~disclosures ofunder ~~Operations~~this ~~as they occur~~Item.

~~The~~Item ~~provisions~~1B: ofUnresolved ~~the~~Staff Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to the regulations of swaps and the rules thereunder could have an adverse effect on our ability to use derivative instruments to hedge risks associated with our businessComments.

Provisions of the Dodd-Frank Act and rules adopted and that will be adopted by the Commodity Futures Trading Commission (the "CFTC") pursuant to those provisions of the Dodd-Frank Act (the "CFTC Rules") regulate derivative contracts falling within the Dodd-Frank Act's definition of "swaps," the markets in swaps and the parties who enter into them, including parties qualifying as "Swap Dealers" and "Major Swap Participants" (as those terms are defined in the Dodd-Frank Act)None. True physical forward transactions (transactions requiring physical delivery of a commodity in the future) are specifically exempt from the definition of "swap" and most provisions of the Dodd Frank Act and the CFTC. Provisions of Dodd-Frank Act require mandatory clearing over a derivatives clearing organization and mandatory trade execution over a board of trade or swap execution facility of over-the-counter swaps falling in classes of swaps designated by the CFTC for mandatory clearing unless an exception or exemption from such clearing is available. Were we to enter into cleared swaps, we would be required to post margin with respect to such swaps in the form of cash or, in certain circumstances, cash or certain classes of securities. Rules adopted by the CFTC and the U.S. prudential banking regulators (the "Margin Rules") require collection of margin by regulated parties from their counterparties other than "non-financial end users" of swaps in certain circumstances with respect to uncleared swaps, which margin must be posted in the form of cash, certain classes of securities or gold. In addition, as required by the Dodd-Frank Act, the CFTC is in the process of adopting rules limiting

4528

the aggregateIndex size of the positions in swaps that are not bona fide hedges that parties may hold at any time. The Dodd-Frank Act and the CFTC Rules also impose certain record keeping and reporting requirements on parties to swapsFinancial and other requirements on parties qualifying as Swap Dealers and Major Swap Participants. Statements

~~As a~~Item ~~party~~2: whose core business is the exploration, production and sale of oil, natural gas or other energy commodities, and whose positions in swaps are solely for the purpose of hedging commercial risks associated with its core business, and not for trading swaps, we believe that we will be eligible to elect the end user exception from the mandatory clearing and trade execution requirements for any swaps we enter that are subject to such requirements. Moreover, we believe we will qualify as a "non-financial end user" under the Margin Rules and will not be required to post margin under the Margin Rules with respect to any uncleared swaps to which we are a party. However, our counterparties to uncleared swaps we enter into in the future may contractually require us to post collateral with respect to such uncleared swaps as we are currently required to do with respect to our existing swaps, which are collateralized by our oil and natural gas properties and other assets, not including cash. If we were to have to clear any swap to which we are a party and post margin with respect thereto or post margin under the Margin Rules with respect to any uncleared swaps, we would likely have to use our cash to post such margin, which would adversely affect our liquidity and our ability to fund our operations. Properties

~~Although we~~A dodescription ~~not~~of ~~expect~~our toproperties beis ~~deemed~~included ~~to be, or to be regulated as, as "Swap Dealer" or "Major Swap Participant," our counterparties~~ in ~~financial~~Items 1 ~~derivatives~~and ~~contracts~~2. ~~may be regulated~~Business ~~as "Swap Dealers" or "Major Swap Participants"~~ and, inProperties ~~order~~above ~~to comply with regulations applicable to them, these counterparties may require that we supply certain information to them from time-to-time,~~ and ~~engage~~is inincorporated ~~certain~~herein ~~procedures~~by ~~regarding the swaps we enter into with them~~reference.

~~The nature~~We ~~and~~believe ~~scope~~that ofwe ~~the~~have ~~provisions~~satisfactory oftitle ~~the Dodd-Frank Act relating~~ to the ~~regulation~~properties ofowned ~~swaps~~ and ~~the~~used in ~~CFTC Rules thereunder could adversely affect~~ our ~~ability~~business, subject to ~~implement~~customary ~~and~~liens ~~execute our~~for ~~hedging~~taxes ~~strategy.~~not Inyet ~~addition~~payable, ~~our~~liens ~~hedging~~incident ~~activities~~to ~~could~~minor ~~result~~encumbrances, inliens ~~the~~for ~~imposition~~credit ~~of additional administrative burdens on us and expenses to us. Moreover~~arrangements, ~~the requirements~~ and ~~limitations imposed~~easements ~~by the Dodd-Frank Act~~ and ~~the~~restrictions ~~CFTC~~that ~~Rules~~do onnot ~~our~~materially ~~derivative~~detract ~~counterparties~~from ~~could increase~~ the ~~costs~~value of ~~pursuing~~the ~~our~~properties, ~~hedging strategy and cause us to use~~ our ~~cash to post margin~~ interests in ~~certain circumstances.~~the ~~Finally~~properties, ~~since~~or the ~~swaps~~use ~~regulatory provisions~~ of the ~~Dodd-Frank~~properties ~~Act were intended,~~ in ~~part,~~our tobusiness. ~~decrease~~We ~~the~~believe ~~volatility of commodity prices by restricting speculative trading in derivatives contracts,~~ our ~~revenues~~properties ~~could~~are beadequate ~~negatively affected if the Dodd-Frank Act~~ and ~~the~~suitable ~~CFTC~~for ~~Rules result in lower commodity prices. Any of these consequences could have a material adverse effect on~~ us, ~~our~~to ~~financial~~conduct ~~condition,~~business ~~our~~in ~~results~~the ~~of operations, our cash flows and our liquidity~~future.

~~Our~~Item ~~hedging~~3: ~~program~~Legal ~~may be inadequate to protect us against continuing and prolonged declines in the price of oil and natural gas.~~ Proceedings

WeEmergence ~~have significant percentages of estimated volumes hedged through 2016 (274,000 bbls of oil and 14.3 Bbtu of natural gas). These hedges may be inadequate to protect us~~ from ~~continuing~~Voluntary ~~and~~Reorganization ~~prolonged~~under ~~declines~~Chapter in11 the price of oil and natural gas. Additionally, we have not entered into any significant hedging transactions with respect to our anticipated 2017 oil and gas production. To the extent that oil and natural gas prices remain at current levels or decline further, we will not be able to hedge future production at the same level as our current hedges, and our results of operations and financial condition would be negatively impacted.

46On June 2, 2016, the Company and certain of its wholly owned subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Case No. 16-32760. The Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The subsidiary Debtors in the Chapter 11 Cases were Warren E&P, Warren California, Warren Marcellus, Warren Energy Services, LLC and Warren Management Corp., which represent all subsidiaries of the Company. On September 14, 2016, the Bankruptcy Court entered an order approving the Plan of Reorganization of Warren Resources, Inc. and Its Affiliated Debtors On October 5, 2016, the Plan became effective pursuant to its terms, and the Debtors completed their reorganization under the Bankruptcy Code.

~~Table~~The description of ~~Contents~~the Plan can be found in its entirety by reference to the full text of the Confirmation Order, filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 20, 2016.

~~Proposed~~Litigation ~~changes~~in tothe ~~U.S.~~Normal ~~and~~Course ~~state tax laws, if adopted, could have an adverse effect on our business, financial condition, results~~ of ~~operations~~Business ~~and cash flows.~~

~~President~~We ~~Obama~~are ~~has~~party ~~made~~to ~~proposals,~~a ~~including~~variety inof ~~the Budget for Fiscal Year 2016~~legal, ~~that would~~administrative, ifregulatory ~~enacted~~and ~~into~~government ~~law~~proceedings, ~~make~~claims ~~significant changes to United States tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to oil~~ and ~~natural~~inquiries ~~gas~~arising ~~exploration and production companies. Legislation has been introduced~~ in ~~Congress~~the ~~that~~normal ~~would~~course ~~implement many~~ of ~~President Obama's proposals~~ business. ~~These~~While ~~changes include, but are not limited to, (i)~~ the ~~repeal~~results of ~~the~~these ~~percentage~~proceedings, ~~depletion allowance~~claims ~~for oil~~ and ~~natural~~inquiries ~~gas~~cannot ~~properties,~~be ~~(ii) the~~predicted ~~elimination~~with ~~of current deductions for intangible drilling and development costs~~certainty, ~~(iii) the~~management ~~elimination~~believes ofthat the ~~deduction~~ultimate ~~for~~outcome ~~certain U.S. production activities for oil and gas production, and (iv) an extension~~ of ~~the amortization period for certain geological and geophysical expenditures. It is unclear, however, whether any~~ such ~~changes~~matters will benot ~~enacted~~have ~~or how soon such changes could be effective. The passage of any legislation as~~ a ~~result~~material ofeffect ~~these~~on ~~proposals~~the orCompany’s ~~any~~financial ~~other~~condition ~~similar changes in U.S. federal income tax laws could defer~~ or ~~eliminate certain tax deductions that are currently available with respect to oil and natural gas exploration and development, and any such change could negatively affect our financial~~ ~~condition,~~ results of operations ~~and cash flows~~.

~~We could~~Item ~~also~~4: beMine ~~adversely~~Safety affected by future changes to applicable state tax laws and regulations. For example, proposals have been made to amend California State and local laws to impose "windfall profits," severance or other taxes on oil and natural gas companies. If any of these proposals become law, our costs would increase, possibly materially. Significant financial difficulties currently facing the State of California and other localities may increase the likelihood that one or more of these proposals will become law. For example, in California, there have been proposals at the legislative and executive levels over the past several years for tax increases which have included a severance tax as high as 12.5% on all oil production in California. Although the proposals have not passed the California Legislature, the financial crisis in the State of California could lead to a severance tax on oil being imposed in the future. Disclosures

~~In February~~Not ~~2012, the state legislature of Pennsylvania passed a new natural gas impact fee~~applicable. The legislation imposes an annual fee on natural gas and oil operators for each well drilled for a period of fifteen years. The fee is on a sliding scale set by the Public Utility Commission and is based on two factors: changes in the Consumer Price Index and the average NYMEX natural gas prices from the last day of each month. There can be no assurance that the impact fee will remain as currently structured or that new or additional taxes will not be imposed. In addition, there is currently no severance tax imposed on natural gas or oil in Pennsylvania. However, on February 11, 2015, Pennsylvania Governor Tom Wolf proposed the Pennsylvania Education Reinvestment Act, a new severance tax targeting proceeds from production of unconventional natural gas wells within the state of Pennsylvania. The proposal includes a 5% tax on the value of the gas at the wellhead plus a 4.7cents per thousand cubic feet of volume severed. Additionally, no portion of the tax imposed in this legislation would be allowed to be deducted from royalty payments. The Governor's office has stated that this proposal would replace the existing impact fee. There is no assurance as to the final form of the proposal, or whether the proposal will be adopted. Changes to the current impact fee, or the imposition of a new severance tax, could negatively affect our future cash flows and financial condition; however, no assurance can be made until the severance tax is made final.

~~Our~~PART ~~operations~~II ~~are subject to environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities.~~

~~Our~~Item ~~oil~~5: ~~and~~Market ~~natural~~for ~~gas~~the ~~exploration~~Registrant’s ~~and~~Common ~~production operations are subject to stringent and comprehensive federal~~Equity, ~~regional,~~Related ~~state~~Stockholder ~~and local~~Matters ~~laws~~ and ~~regulations~~Issuer ~~governing~~Purchases ~~occupational health and safety aspects~~ of ~~our~~Equity ~~operations, the discharge of materials into the environment, or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable~~ Securities

47Market Information.

~~Table~~There is no established public trading market for our common stock. Therefore, there is a risk that a stockholder may not be able to sell our stock at a time or price acceptable to the stockholder. Unless and until shares of ~~Contents~~our common stock are listed on a national securities exchange, it is not expected that a public market for shares of our common stock will develop.

~~to our~~Holders operations, including the acquisition of a permit before conducting drilling or other regulated activities; restriction of types, quantities and concentration of materials that can be released into the environment; limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; application of specific health and safety criteria addressing worker protection; and imposition of substantial liabilities for pollution resulting from our operations. Numerous governmental authorities, such as the EPA, and analogous state agencies have the power to enforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly compliance or corrective actions. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, the imposition of investigatory or remedial obligations and the issuance of orders limiting or prohibiting some or all of our operations.

~~There is~~As ~~inherent risk~~ of ~~incurring significant environmental costs and liabilities in the performance of our operations~~March 31, as2017 athere result of our handling of petroleum hydrocarbons and wastes, because of air emissions and wastewater discharges related to our operations and due to historical industry operations and waste disposal practices. Under certain environmental laws and regulations, we could be subject to joint and several, strict liability for the removal or remediation of previously released materials or property contamination regardless of whether we were ~~responsible~~ ~~for~~approximately ~~the~~70 ~~release~~record orholders ~~contamination or if the operations were not in compliance with all applicable laws at the time those actions were taken. Private parties, including the owners~~ of ~~properties~~ ~~upon which~~ our ~~wells~~common are drilled and facilities where our petroleum hydrocarbons or wastes are taken for reclamation or disposal, also may have the right to pursue legal actions to enforce compliance as well as to seek damages for non- compliance with environmental laws and regulations or for personal injury or property or natural resource damagesstock. In addition, the risk of accidental spills or releases could expose us to significant liabilities that could have a material adverse effect on our business, financial condition or results of operations. Environmental advocacy groups and others continue to raise questions and concerns about potential environmental issues that may be associated with hydraulic fracturing, horizontal drilling, and related operations that are key aspects of our business, including concerns about potential impacts on groundwater quality, seismic activity, and greenhouse gas emissions; any of these could lead to changes in regulations in one or more of the jurisdictions in which we operate. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly well drilling, construction, completion or water management activities, or waste control, handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our own results of operations, competitive position or financial condition. We may not be able to recover some or any of these costs from insurance.

~~The~~Dividend ~~geographic~~Policy concentration of our oil reserves in California exposes us to more risks and may have a greater effect on our ability to sell our oil production than if our reserves were more geographically diversified.

AWe ~~substantial~~have ~~portion~~never ofpaid ~~our~~or declared ~~revenues~~any ~~are~~cash ~~generated~~dividends ~~from~~on ~~oil~~our ~~sales~~common ~~and~~stock. ~~all~~Dividends ofare ~~our~~also ~~oil~~restricted ~~reserves~~under ~~are~~the ~~located~~terms inof ~~California~~Exit Credit Facility. ~~Any~~We ~~regional events,~~currently ~~including~~intend ~~price~~to ~~fluctuations~~retain earnings, ~~natural~~if ~~disasters~~any, ~~and~~to ~~restrictive~~service ~~regulations~~our ~~that~~debt ~~increase~~obligations ~~costs,~~and ~~reduce~~finance ~~availability~~the ofgrowth ~~equipment~~and ordevelopment ~~supplies,~~of ~~reduce~~our business ~~demand~~and orwe ~~limit~~do ~~our~~not ~~production~~expect ~~may~~to ~~impact our~~pay ~~operations~~any ~~more~~cash ~~than~~dividends ifon our ~~reserves~~common ~~were~~stock ~~more~~in ~~geographically~~the ~~diversified~~foreseeable future.

~~Our California~~29 oil production is, on average, heavier than premium grade light oil and the margin (sales price minus production costs) is generally less than that of lighter oil sales due to the processes required to refine this type of oil and the transportation requirements. As such, the effect of material price decreases will more adversely affect the profitability of heavy oil production compared with lighter grades of oil.

48Table of Contents

TableIndex ofto ContentsFinancial Statements

WeRecent ~~are~~Sales ~~subject to the full cost ceiling limitation which may result in a write-down~~ of ~~our~~Unregistered ~~estimated net~~Securities ~~reserves in the future.~~

~~We utilize the full cost method of accounting for costs related to our oil and natural gas properties~~None. Under the full cost method, we are subject to quarterly calculations of a "ceiling" or limitation on the amount of our oil and natural gas properties that can be capitalized on our balance sheet. If the net capitalized costs of our oil and natural gas properties exceed the cost center ceiling, we are subject to a write-down of our net oil and natural gas properties to the extent of such excess. A capitalized cost ceiling test impairment also reduces earnings and impacts stockholders' equity in the period of occurrence and results in lower amortization expense in future periods. The discounted present value of our proved reserves is a major component of the ceiling calculation and represents the component that requires the most subjective judgments. The risk that we will be required to write down the carrying value of oil and natural gas properties increases when oil and natural gas prices are depressed or volatile.

~~The Company~~Securities ~~recorded~~Authorized ~~impairment expense of $578.3 million and $-0-~~ for ~~2015 and 2014 respectively, relating to its ceiling test write down of oil and gas properties. This resulted~~Issuance ~~from~~Under aCompensation ~~significant~~Plans drop in our PV-10 value reflecting lower commodity prices in 2015. The trailing twelve month SEC pricing used in our reserve report for oil decreased 51% from $86.71 at December 31, 2014 to $42.81 at December 31, 2015 and twelve month gas prices decreased 46% from $3.22 at December 31, 2014 to $1.74 at December 31, 2015. Further ceiling write-downs may occur in future quarters as average SEC trailing twelve month prices decline.

~~Certain of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage~~None.

AsThe oftable ~~December 31,~~below ~~2015,~~includes weinformation ~~own~~about leasehold interests in approximately 70,631 shallow undeveloped net acres in the Washakie Basin of Wyoming that we believe may be prospective for CBM development and approximately 59,035 deep undeveloped net acres in areas we believe may be prospective for the Niobrara Shale and other deep formations. A large portion of our ~~acreage~~equity incompensation ~~the~~plans ~~Washakie~~as ~~Basin is not currently held by production. Unless the BLM grants further deferral~~ of ~~Warren's drilling obligation as described above~~December 31, ~~or production in paying quantities is established on these leases~~2016, oreach ~~the leases are committed to a new unit, approximately 3,829 net acres, 427 net acres and 28,781 net acres~~ of ~~these~~which ~~shallow~~has ~~leases~~been ~~will~~approved ~~expire~~by ~~in 2016, 2017 and 2018, respectively. If~~ our ~~leases expire, we will lose our right to develop the related properties, and could~~ ~~lose~~stockholders: ~~up to a total of 33,030 net acres of shallow rights and 32,798 total net acres of deep rights by the end of 2018.~~

Our drilling plans for these areas are subject to change based upon various factors, many of which are beyond our control, including drilling results, oil and natural gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, gathering system and pipeline transportation constraints, and regulatory approvals. Further, some of our acreage is located in areas where we do not hold the majority of the acreage and therefore it is likely that we will not be named the operator of these areas. As a non-operating leaseholder we have less control over the timing of drilling, and there is additional risk of expirations occurring in sections where we are not the operator. Any of these factors may have a material adverse effect on our future business, financial condition and results of operations.


	Number of Shares Authorized for Issuance under plan		Number of securities to be issued upon exercise of outstanding options and restricted stock		Weighted-average exercise price of outstanding options and restricted stock		Number of securities remaining available for future issuance under equity compensation plans
2016 Equity Incentive Plan		600,000		0	$	N/A		600,000

~~Part~~Item of6: ~~our~~Selected ~~strategy~~Financial ~~involves using some of the latest available horizontal drilling and completion techniques, which involve risks and uncertainties in their application.~~ Data

~~Our~~We ~~operations~~are ina ~~Pennsylvania~~smaller ~~involve~~reporting ~~utilizing~~company ~~some~~as ofdefined ~~the~~in ~~latest~~Rule 12b-2 ~~drilling~~of ~~and~~the ~~completion~~Exchange ~~techniques~~Act; astherefore, ~~developed~~pursuant byto usRegulation S-K, ~~other~~we ~~oil and~~are ~~gas~~not ~~exploration~~required ~~and~~to ~~production~~make ~~companies~~disclosures ~~and~~under ~~our~~this ~~service~~Item.

49Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Table~~The discussion and analysis that follows should be read together with the “Selected Consolidated Financial Data” and the accompanying financial statements and notes related thereto that are included elsewhere in this annual report on Form 10-K. It includes forward-looking statements that may reflect our estimates, beliefs, plans and expected performance. The forward-looking statements are based upon events, risks and uncertainties that may be outside our control. Our actual results could differ significantly from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include but are not limited to, market prices for natural gas and oil, regulatory changes, estimates of ~~Contents~~proved reserves, economic conditions, competitive conditions, development success rates, capital expenditures and other uncertainties, as well as those factors discussed below and elsewhere in this annual report on Form 10-K, including in “Cautionary Note Regarding Forward-Looking Statements”, all of which are difficult to predict. As a result of these assumptions, risks and uncertainties, the forward-looking matters discussed may not occur.

~~providers. Risks~~30 ~~that we face while drilling, including or as a result of the application of these techniques, include, but are not limited to, the following:~~

Risks thatTable we face while completing our wells, including or as a result of the application of these techniques, include, but are not limited to, the following:Contents

DrillingIndex forto andFinancial producing oil and natural gas are high risk activities with many uncertainties that could have a material adverse effect on our business, financial condition or results of operations. Statements

~~Our~~Overview future success depends largely on the success of our exploration, exploitation, development and production activities. These activities are subject to numerous risks beyond our control, including the risk that we will not find any commercially productive natural gas or oil reservoirs. Our decisions to purchase, explore, develop or otherwise exploit prospects or properties depends in part on the evaluation of geophysical and geological analyses, production data, and engineering studies, the results of which are often inconclusive or subject to varying interpretations. Our costs of drilling, completing, producing and operating wells are often uncertain before drilling commences. Drilling for oil and natural gas can be unprofitable, not only from dry holes, but from productive wells that do not produce sufficient revenues to cover the costs or return a profit. In addition, our drilling and producing operations, may be curtailed, delayed or canceled as a result of other factors, including:

50We are an independent energy company engaged in the exploration and development of domestic onshore oil and natural gas reserves. We focus our efforts primarily on the development of our waterflood oil recovery properties in the Wilmington field within the Los Angeles Basin of California, the Marcellus Shale in northeastern Pennsylvania and our coalbed methane, or CBM, natural gas properties located in the Wyoming region.

~~Table~~As of ~~Contents~~December 31, 2016, we owned natural gas and oil leasehold interests in approximately 105,897 gross (80,099 net) acres, approximately 66% of which were undeveloped. Substantially all our undeveloped acreage is located in Wyoming. Our total estimated net proved reserves are located on approximately 30% of our net acreage.

~~Our future~~Liquidity ~~drilling activities may not be successful. Our drilling success rate could decline generally or within a particular area~~ and weCapital ~~could~~Resources incur losses by drilling unproductive wells. Also, we may not be able to obtain sufficient contracts covering our lease rights in potential drilling locations. We cannot be sure that we will ever drill our identified potential drilling locations, or that we will produce natural gas or oil from them or from any other potential drilling locations. Shut-in wells, curtailed production and other production interruptions may negatively impact our business and result in decreased revenues.

Our cash ~~All~~and ofcash ~~our~~equivalents ~~oil~~decreased ~~production~~approximately $21.1 million in ~~California~~2016 isto ~~dedicated~~$5.6 million compared to ~~one~~2015. ~~customer~~This resulted from cash used in operating activities of $25.5 million and ascash aused ~~result,~~in ~~our~~investing ~~credit~~activities of $3.9 million ~~exposure~~which towas ~~this~~offset ~~customer~~by iscash ~~significant~~provided by financing activities of $10. 0 million.

WeCapital ~~have~~expenditures ~~entered~~for ~~into~~2016 anamounted ~~oil~~to $5.1 million ~~marketing arrangement with Phillips 66 Company (formerly ConocoPhillips) under~~ which ~~Phillips~~represents 66an ~~Company purchases~~86% ~~all~~reduction ofin ~~our~~spending ~~net~~from ~~oil~~the ~~production~~2015 ~~in California~~level. WeThis ~~generally~~drastic doreduction ~~not~~reflects ~~require~~the ~~letters~~severe ofcash ~~credit~~limitations orimposed ~~other~~on ~~collateral~~the toCompany ~~support these trade receivables. Accordingly, a material adverse change~~ in ~~their~~ financial condition or their unwillingness to enter into future purchase arrangements could adversely impact our ability to sell our California oil, and thereby adversely affect our business, results of operations or financial condition2016.

Our ~~development~~primary ~~and~~sources ~~exploration~~of ~~operations~~pre-petition ~~require~~liquidity ~~substantial~~through ~~capital~~the ~~and~~first wehalf ~~may~~of bethe ~~unable~~calendar ~~to obtain~~year ~~needed~~was ~~capital~~cash provided orby ~~financing~~operations. onThe ~~satisfactory~~Company ~~terms,~~also ~~which~~had ~~could~~access ~~lead~~ to a ~~loss~~post-petition $20 million DIP Credit Facility during the pendency of ~~properties~~the ~~and~~Chapter a11 ~~decline~~Cases in(as ~~our~~defined ~~oil~~below). ~~and~~This ~~natural~~was ~~gas~~never ~~reserves~~utilized, as operating cash flow was sufficient to meet post-filing obligations.

~~The~~Upon ~~oil~~emergence ~~and~~from ~~natural~~the ~~gas~~Chapter ~~industry~~11 isCases ~~capital~~(as ~~intensive.~~defined Webelow),bankruptcy, ~~spend~~Warren ~~and~~was ~~will~~provided ~~continue~~with ~~to need~~ a $150 million ~~substantial~~term ~~amount~~loan, of ~~capital~~which ~~for~~$130 million ~~the acquisition,~~was ~~exploration,~~immediately ~~exploitation,~~deemed ~~development~~outstanding ~~and~~as ~~production~~the ofinitial ~~oil~~debt ~~and~~under ~~natural~~the ~~gas~~terms ~~reserves.~~of Wethe ~~have~~restructuring, ~~historically~~and ~~addressed~~$20 million ~~our~~of ~~short~~“new ~~and~~credit” ~~long-term~~available ~~liquidity~~on ~~needs~~a ~~through~~delayed ~~the~~draw ~~use~~basis. ofWarren ~~cash flow~~borrowed ~~provided~~$10 million byof ~~operating~~this ~~activities,~~amount ~~borrowing~~during ~~under~~the ~~our~~fourth ~~Credit~~quarter ~~Facilities,~~of 2016 and the ~~issuance~~balance ofremained ~~equity~~undrawn ~~and~~at ~~debt securities~~year-end. ~~Without~~See ~~adequate~~the ~~financing~~section webelow ~~may~~for ~~not~~an beexpanded ~~able~~description toof ~~successfully~~this ~~execute our operating strategy~~facility. The ~~availability~~full ofdescription ~~these sources~~ of ~~capital~~this term ~~will~~loan ~~depend~~is ~~upon~~below ain ~~number~~the ofsection ~~factors,~~titled ~~some~~“Successor ofExit ~~which~~Credit ~~are beyond our control~~Facility.” ~~These factors include:~~

51Reorganization

~~Table~~On June 2, 2016, the Company and certain of ~~Contents~~its wholly owned subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Case No. 16-32760. The Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The subsidiary Debtors in the Chapter 11 Cases were Warren E&P, Inc, Warren Resources of California, Inc., Warren Marcellus, LLC, Warren Energy Services, LLC and Warren Management Corp., which represent all subsidiaries of the Company. On September 14, 2016, the Bankruptcy Court entered an order (the “Confirmation Order”) approving the Plan of Reorganization of Warren Resources, Inc. and Its Affiliated Debtors (as amended and supplemented, the “Plan”). On October 5, 2016 (the “Effective Date”), the Plan became effective pursuant to its terms, and the Debtors completed their reorganization under the Bankruptcy Code.

WeFresh-start ~~may~~Accounting not be able to execute our operating strategy if we cannot obtain adequate capital. If low oil and natural gas prices, lack of adequate gathering or transportation facilities, operating difficulties or other factors, many of which are beyond our control, cause our revenues and cash flows from operating activities to decrease, our access to the capital markets could be hindered and the trading prices of our securities could decline further, limiting our ability to obtain the capital necessary to sustain our operations.

~~Additional~~Upon the ~~financing~~Company’s ~~sources~~emergence ~~may~~from bechapter ~~required~~11 inbankruptcy, the ~~future~~Company toqualified ~~fund~~for ~~our~~and ~~developmental~~adopted ~~and~~fresh-start ~~exploratory~~accounting ~~drilling.~~in ~~Financing~~accordance ~~may~~with ~~not~~the beprovisions ~~available~~set forth in ASC 852 as (i) the ~~future~~Reorganization ~~under~~Value ~~existing~~of orthe ~~new~~Company’s assets immediately ~~financing~~prior ~~arrangements,~~to orthe wedate ~~may~~of ~~not~~confirmation bewas ~~able~~less tothan ~~obtain~~post-petition liabilities and allowed claims, and (ii) the ~~necessary~~holders ~~financing~~of onthe ~~acceptable~~existing ~~terms,~~voting ifshares atof ~~all.~~the IfPredecessor ~~sufficient~~entity ~~capital~~received ~~resources~~less ~~are~~than ~~not~~50% ~~available,~~of wethe ~~may~~voting beshares ~~forced~~of the merging entity. Fresh-start accounting required the Company to ~~curtail~~present ~~drilling~~its assets, ~~acquisition~~ liabilities, and ~~other~~equity ~~operations,~~as orif ~~sell~~it ~~some~~were ofa ~~our~~new ~~assets~~entity onupon anemergence ~~untimely~~from bankruptcy. The new entity is referred to as “Successor” or ~~unfavorable~~“Successor ~~basis~~Company.” WeHowever, the ~~would~~Company ~~also~~will ~~face~~continue ato ~~possible~~present ~~loss~~financial ofinformation ~~properties~~for ~~and~~any aperiods ~~decline~~before inadoption ~~our~~of ~~oil~~fresh-start ~~and~~accounting ~~natural~~for ~~gas~~the ~~reserves, which~~Predecessor ~~would~~Company. ~~have~~The anPredecessor ~~adverse~~and ~~effect~~Successor oncompanies ~~our~~may ~~business~~lack comparability and therefore, “black-line” financial ~~condition~~statements ~~and~~are ~~results~~presented ofto ~~operations~~distinguish between the Predecessor and Successor Companies.

~~Unless~~31 ~~we replace our oil and natural gas reserves, our reserves and production will decline, which would adversely affect our business, financial condition and results of operations.~~

ProducingTable oilof and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Our future success depends on our ability to find, develop or acquire additional oil and natural gas reserves that are economically recoverable. Our proved reserves generally decline when production occurs, unless we conduct successful exploration or development activities or acquire properties containing proved reserves, or both. We may not be able to find, develop or acquire additional reserves on an economic basis. Furthermore, if oil and natural gas prices increase, our costs for additional reserves could also increase. Thus, our future oil and natural gas reserves and production, cash flow and income are highly dependent on our success in efficiently developing and exploiting our current reserves and economically finding or acquiring additional recoverable reserves. We may not be able to find, finance, acquire or develop additional reserves to replace our current and future production at acceptable costs. Contents

OurIndex identified drilling location inventories are scheduled out over several years, making them susceptible to uncertaintiesFinancial that could materially alter the occurrence or timing of their drilling. Statements

~~Our~~Adopting ~~management~~fresh-start ~~has~~accounting ~~identified~~results ~~and~~in ~~scheduled~~a ~~drilling~~new ~~locations~~financial asreporting anentity ~~estimation~~with ofno ~~our future multi-year drilling activities on our~~beginning ~~existing~~retained ~~acreage.~~earnings ~~These~~or ~~identified~~deficit ~~drilling~~as ~~locations represent a significant part~~ of ~~our~~the ~~growth~~fresh-start ~~strategy~~reporting date. ~~Our~~Upon ~~ability to drill and develop these locations depends on a number of uncertainties, including~~ the ~~availability~~application of ~~capital,~~fresh-start ~~seasonal and weather conditions~~accounting, ~~regulatory~~the ~~approvals,~~Company ~~oil~~allocated ~~and~~the ~~natural~~Reorganization ~~gas~~Value ~~prices,~~(the ~~costs~~fair ~~and~~value ~~expenses, and drilling and production results. Because~~ of ~~these uncertainties, we do not know if~~ the ~~potential~~Successor ~~drilling~~Company’s ~~locations~~total weassets) ~~have identified will ever be drilled, or if we will be able~~ to ~~produce~~its ~~natural~~individual ~~gas~~assets based oron ~~oil~~their ~~from~~estimated ~~these~~fair ~~or any other potential drilling locations~~values. AsThe ~~such,~~Reorganization ~~our~~Value ~~actual~~is ~~drilling~~intended ~~activities~~to ~~may~~represent ~~materially~~the ~~differ~~approximate ~~from~~amount ~~those~~a ~~presently~~willing ~~identified,~~buyer ~~which~~would ~~could~~value ~~adversely~~the ~~affect~~Company’s ~~our~~assets ~~business,~~immediately ~~financial~~after ~~condition~~the ~~and results of operations~~reorganization.

WeSuccessor ~~face~~Exit ~~increasing~~Credit ~~natural~~Facility ~~gas disposal regulations and costs in our Wilmington oil operations that could limit our oil production.~~

~~The~~On ~~State~~the Effective ofDate, ~~California~~pursuant ~~and~~to the ~~EPA~~Plan, ~~have~~the ~~restrictive~~Company ~~regulations~~entered ~~for~~into ~~the~~a ~~disposition~~Credit ofAgreement ~~natural~~by ~~gas~~and ~~produced~~among ~~from~~the ~~our~~Company, Wilmington ~~oil drilling~~Trust, ~~operations.~~National ~~Natural~~Association, ~~gas~~as ~~production~~Administrative ~~has~~Agent ~~continued~~(the to“Agent”), ~~grow~~and ~~along~~the ~~with~~lenders ~~increasing~~from ~~oil~~time ~~production,~~to ~~particularly~~time inparty thereto (the “Credit ~~WTU~~Agreement”). ~~Because~~The ~~the~~Credit ~~gas~~Agreement ~~volume~~provides ~~from~~for ~~the~~a ~~WTU~~$150 million ~~was~~term ~~historically~~loan ~~too~~facility ~~low~~(the to“Exit ~~justify gas~~Credit ~~sales equipment~~Facility”), ~~the~~consisting ~~gas~~of ~~has~~initial ~~been~~senior ~~flared~~secured ~~for~~term ~~many~~loans ~~years~~in ~~under~~an aaggregate ~~permit~~principal ~~from~~amount ~~the~~of ~~South~~$130 million (which, ~~Coast~~pursuant ~~Air~~to ~~Quality~~the ~~Management~~Plan, ~~District~~is ~~("SCAQMD").~~deemed Into ~~late~~be ~~2007,~~outstanding ~~Warren~~without ~~entered~~any ~~into~~advancement anof ~~agreement~~funds ~~with~~by the ~~SCAQMD~~ ~~which~~lenders ~~allowed~~under ~~Warren~~the ~~to commission~~Credit ~~six~~Agreement) ~~microturbines~~and toadditional ~~generate~~senior ~~electrical~~secured ~~power~~term ~~from~~loans (the ~~otherwise~~“delayed ~~flared~~draw ~~gas~~term ~~and~~loans”) ~~resume~~in ~~full~~an ~~production.~~aggregate Asprincipal ~~oil~~amount of ~~production~~up ~~grew~~to ~~since~~$20 million, ~~that time~~which, subject to the ~~excess~~conditions ~~gas~~set ~~produced~~forth ~~but~~in ~~not~~the ~~consumed~~Credit Agreement, may be drawn from time to time by ~~our~~ ~~microturbines~~the ~~began~~Company.

52The outstanding term loans, along with accrued and unpaid obligations with respect to such loans, under the Exit Credit Facility are subject to prepayment in respect of (i) proceeds from the issuance or incurrence of debt, excluding those items of debt permitted to be issued or incurred under the Credit Agreement and (ii) casualty proceeds and proceeds received from asset dispositions, subject to limited reinvestment rights and certain excluded asset sales. The Exit Credit Facility is guaranteed by all of the Company’s wholly owned subsidiaries. The Exit Credit Facility is secured by substantially all of the oil and gas assets of the Company and the Guarantors, as well as all of the equity interests in the Guarantors. Certain third-party swap and derivative transactions may be secured pursuant to an intercreditor agreement on a pari passu basis with the same collateral securing the Exit Credit Facility. The Exit Credit Facility also includes certain covenants, including a net debt to EBITDA ratio as defined in the credit agreement.

~~Table~~Proceeds of ~~Contents~~the delayed draw term loans under the Exit Credit Facility may be used from time to time for lawful corporate purposes, including for working capital needs and to finance corporate and capital expenditures and permitted acquisitions of oil and gas properties and other assets related to the exploration, production, development, processing, gathering, storage and transportation of hydrocarbons.

~~to exceed~~The ~~our~~interest ~~gas~~rate ~~flare~~on ~~limitation.~~borrowings Inunder ~~March 2008, we presented our plan to~~ the ~~SCAQMD~~Exit toCredit ~~seek~~Facility ~~approvals~~will ~~from~~be ~~regulatory~~equal ~~authorities~~ to ~~dispose of our WTU produced gas by re-injection in underground formations or by selling it directly to a third party user. Warren also applied to~~ the ~~SCAQMD~~sum ~~for~~of ~~a permit to construct a new high efficiency clean enclosed burner to replace~~ (i) the ~~existing~~LIBOR ~~gas~~rate ~~flare.~~(with ~~Our~~a ~~filed~~minimum ~~applications~~LIBOR ~~for~~rate ~~permits requested the authority to install and operate certain pieces~~ of ~~new~~1%) ~~best~~plus ~~available control technology equipment~~9. ~~On July~~0% ~~19,~~per ~~2011~~annum ~~the~~on ~~SCAQMD certified~~ the ~~Company's~~ ~~CEQA~~aggregate ~~documents~~outstanding ~~and~~principal ~~issued~~amount ~~all~~ of the ~~related~~loans ~~permits~~outstanding, ~~including~~which ~~gas~~shall ~~handling~~be ~~equipment.~~paid ~~These~~in ~~equipment~~cash, ~~upgrades~~plus ~~will~~(ii) an ~~help~~amount ~~increase~~equal ~~the~~to ~~Company's~~1.0% per ~~oil~~annum ~~processing~~on ~~capability~~the toaggregate aoutstanding ~~ceiling of~~principal ~~5,000~~amount ~~barrels~~ of ~~oil per day at~~ the ~~Wilmington~~loans ~~Townlot~~outstanding, ~~Unit.~~which Asshall ~~requested~~be ~~by the SCAQMD,~~ paid-in-kind ~~2012~~and ~~the~~added ~~Company began preparing an additional analysis under CEQA~~ to ~~analyze and mitigate~~ the ~~potential~~outstanding ~~air and~~principal ~~other~~amount ~~emissions~~of ~~that may be associated with pipeline connections and~~ the ~~installation~~loans ofon ~~gas~~each ~~transportation,~~quarterly ~~compression~~interest ~~and~~payment ~~related~~date. ~~equipment that will be required to sell excess gas through a~~Other ~~local~~than ~~gas~~with ~~utility~~respect ~~company~~ to ~~third~~prepayments ~~parties.~~or ~~This~~during ~~additional~~periods ~~CEQA analysis was completed~~ in ~~late~~which ~~2014,~~the ~~and~~outstanding ~~construction~~principal ~~permits~~amount ~~were~~of ~~issued by~~ the ~~SCAQMD.~~loans ~~Warren~~and isother ~~currently~~obligations ~~constructing~~under ~~and installing~~ the ~~gas~~Exit ~~transportation,~~Credit ~~compression~~Facility ~~and~~is ~~related~~subject ~~equipment,~~to ~~and~~an ~~will~~increased ~~schedule~~interest ~~governmental~~rate ~~inspections~~following of the ~~system~~occurrence ~~and~~of ~~its~~an ~~operating~~event ~~capabilities~~of ~~in late 2016. Any delays in obtaining~~default ~~equipment~~under ~~or constructing~~ the ~~system;~~Credit ~~any~~Agreement, ~~delays~~interest byon ~~regulatory~~each ~~agencies~~loan orunder ~~public utilities in approving or inspecting~~ the ~~operation~~Exit ofCredit ~~the~~Facility ~~system~~shall orbe ~~issuing~~due ~~permits~~and inpayable on the ~~future~~next to ~~operate~~last ~~the system~~business orday ~~dispose~~ of ~~the~~each ~~natural~~March, ~~gas~~June, orSeptember ~~our~~and ~~inability~~December toand ~~locate~~on aMay 22, ~~third~~2020, ~~party to purchase~~ the ~~excess~~maturity ~~gas~~date ~~could~~under ~~limit~~the ~~our~~Credit Agreement ~~future~~(the ~~oil~~“Maturity ~~production levels until such matters are resolved~~Date”).

WeThe ~~may~~outstanding bebalance ~~affected~~of bythe ~~climate~~Exit ~~change~~Credit ~~and~~Facility ~~market~~at orDecember 31, ~~regulatory~~2016 ~~responses~~amounted to $140.3 million ~~climate~~which ~~change~~includes $0. 3 million of paid-in-kind interest.

~~Climate~~During ~~change~~2016, ~~including~~ the ~~impact~~Company ofreported ~~global warming, could have~~ a ~~material~~net ~~adverse~~loss ~~effect on our results~~ of ~~operations,~~$317.6 million ~~financial condition,~~(which ~~and~~included ~~liquidity~~$232.2 million ~~Restrictions, caps, taxes, or other controls on emissions~~ of ~~greenhouse~~impairment ~~gasses,~~expense ~~including exhaust from generators, engines~~ and ~~flaring of excess natural gas, could~~ ~~significantly increase our operating costs~~$35. ~~Restrictions on emissions could also affect businesses that (a)~~5 ~~use~~million ~~oil and natural gas to produce energy, or (b) manufacture or produce goods that consume significant amounts~~ of ~~energy~~interest ~~or burn fossil fuels, including chemical producers, farmers and food producers, and automakers and other manufacturers~~expense). ~~Significant~~This ~~cost~~compares ~~increases, government regulation, or changes of consumer preferences for goods or services relating~~ to ~~alternative~~2015 ~~sources~~when ~~of energy or emissions reductions could materially affect~~ the ~~markets~~Company ~~for~~had ~~the oil and natural gas commodities, which in turn could have~~ a ~~material~~net ~~adverse~~loss ~~effect on our results~~ of ~~operations, financial condition, and liquidity~~$620.0 million ~~Government~~(which ~~incentives~~included encouraging the use of alternative sources of energy could also affect certain of our oil and natural gas commodity purchasers and the markets for certain of the commodities in an unpredictable manner, including, for example, the impacts of ethanol incentives on farming and ethanol producers and tax credits for wind turbine and solar power generation$578.3 million ~~We could face increased costs related to defending and resolving legal claims and other litigation related to climate change and the alleged impact~~ of ~~our~~impairment ~~operations~~expense on climate change. Finally, some scientists have concluded that increasing concentrations of greenhouse gases, or GHGs in the Earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency and ~~severity of storms, droughts and floods and other climatic events~~$30.4 million ~~Any~~ of ~~these~~interest factors, individually or in conjunction with one or more of the other factors, or other unforeseen impacts of climate change could reduce the demand for oil and natural gas commodities and have a material adverse effect on our results of operations, financial condition and liquidityexpense). ~~For a more detailed discussion, please see "Item 1: Business—Regulations and Environmental Matters—Climate Change Legislation and Greenhouse Gas Regulations."~~

WeOn ~~face~~December 31, ~~significantly~~2016, ~~increasing~~our ~~water~~total ~~injection~~proved ~~and~~reserves ~~disposal~~were ~~regulations~~25.4 ~~and~~MMBoe. ~~costs~~Revisions indecreased ~~our~~2016 ~~drilling~~proved natural gas reserves and oil reserves by ~~operations~~a net amount of 16. 9 Bcf and 7.4 MMbbls as described below:

~~Water~~Wyoming is– anLower ~~essential~~gas ~~component~~prices coupled with increased marketing differentials resulted in a 53% drop in total proved reserves, comprised of ~~oil~~a ~~and~~10% ~~natural~~decrease ~~gas~~in ~~production~~proved ~~during~~developed ~~the~~producing ~~drilling~~reserves, 20% in proved developed non-producing and a 100% drop in ~~particular,~~the ~~hydraulic~~proved ~~fracturing, process~~undeveloped category. ~~Our~~The ~~inability~~total tovalue of ~~locate~~the ~~sufficient~~proved ~~amounts~~reserves of(PV10%) ~~water,~~decreased orby ~~dispose~~$7.4 million from $15.4 million to $8.0 million.

53Pennsylvania – Although the gas pricing used to generate the 2016 reserves was lower than 2015 pricing, marketing differentials decreased significantly resulting in a 17% increase in total proved reserves compared with 2015, virtually all realized in the proved developed producing category. The total value of the proved reserves (PV10%) increase by $12.6 million from a negative $5.6 million to $7.0 million.

~~Table~~California – A significant drop in SEC oil prices resulted in a decrease of ~~Contents~~58% to the total proved reserves. This decrease was comprised of a 33% decrease in proved developed producing reserves, a 25% decrease in

~~of or~~32 ~~recycle water used in our exploration and production operations, could adversely impact our operations.~~

Moreover, theTable imposition of new environmental initiatives and regulations could include restrictions on our ability to conduct certain operations such as hydraulic fracturing or disposal of waste, including, but not limited to, produced water, drilling fluids and other wastes associated with the exploration, development or production of natural gas. The Clean Water Act and similar state laws impose restrictions and strict controls on the discharge of produced waters and other natural gas and oil waste where such discharges could affect surface or ground waters. For example, state and federal regulations prohibit the discharge of produced water and sand, drilling fluids, drill cuttings and certain other substances related to the natural gas and oil industry into coastal waters. We must obtain permits for certain discharges into waters and wetlands and for construction activities that may affect regulated water resources. The EPA has also adopted regulations requiring certain natural gas and oil exploration and production facilities to obtain permits for storm water discharges. The Clean Water Act and similar state laws provide for civil, criminal and/or administrative penalties for any unauthorized discharges of pollutants, reportable quantities of oil and other hazardous substances. Moreover, sending wastewater to publicly-owned treatment works in Pennsylvania requires certain levels of pretreatment that may effectively prohibit such disposal, and our continued ability to use injection wells as a disposal option not only will depend on federal or state regulations, but also on whether available injection wells have sufficient storage capacities. Compliance with current and future federal, state and local environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells may increase our operating costs and cause delays, interruptions or termination of our operations, the extent of which cannot be accurately predicted. Contents

MarketIndex conditions or operational impediments may hinder our access to oilFinancial and natural gas markets or delay our production. Statements

~~Market~~ proved ~~conditions~~developed ornon-producing ~~the~~reserves ~~unavailability of satisfactory oil~~ and ~~natural~~an ~~gas~~88% ~~processing~~decrease orin ~~transportation~~proved ~~arrangements~~undeveloped ~~may hinder our access to oil and natural gas markets or delay our production~~reserves. ~~The~~A ~~marketability~~significant portion of ~~our~~the ~~production~~reduction ~~depends~~ in ~~part~~proved ~~upon the availability, proximity and capacity of pipelines, natural gas gathering~~undeveloped ~~systems~~reserves ~~and~~is ~~processing~~attributable ~~facilities.~~to ~~This~~the ~~dependence~~SEC is“5 ~~heightened~~year inrule”; ~~our~~these ~~CBM~~reserves ~~operations~~will ~~where~~be ~~this~~returned ~~infrastructure~~to isthe ~~less~~reserve ~~developed~~report ~~than~~ in ~~our~~the ~~oil~~following ~~operations. For example~~year, ~~there~~subject isto ~~limited~~pricing. ~~pipeline capacity~~The intotal ~~the~~value ~~southern portion~~ of the ~~Washakie~~proved ~~Basin.~~reserves ~~Also,~~(PV10%) asdecreased ~~production~~by ~~volumes~~$73.0 million ~~grow~~from $85.9 million into ~~the Atlantic Rim area~~$12.9 million, ~~additional~~mainly ~~pipeline~~due ~~capacity~~to pricing and ~~gas~~the ~~compression~~SEC ~~will~~“5 beyear ~~required~~rule”.

WeThe Company’s proved reserves ~~deliver~~decreased ~~oil~~as ~~and~~of ~~natural~~December 31, ~~gas~~2015 ~~through~~compared ~~gathering~~to ~~systems~~prior ~~and~~years. ~~pipelines~~The ~~that~~2015 wedecrease dowas ~~not~~primarily ~~own~~the result of the sustained low commodity price environment. ~~These~~Our ~~facilities~~oil ~~may~~operations ~~not~~include bea ~~available~~secondary torecovery uswaterflood inwith ~~the~~significant ~~future~~fixed costs. During 2015, our oil lease operating expenses were $21.83 per barrel of oil produced. Our ~~ability~~natural togas ~~produce~~operations include reinjecting the produced water into deep formations and ~~market oil~~compressing and transporting the gas with significant fixed costs. During 2015, our natural gas islease ~~affected~~operating ~~and~~expenses were $1.00 per Mcf of gas produced. The Company’s estimated proved reserves are based on assumptions that may prove to be ~~harmed~~inaccurate. ~~by:~~The Company’s estimated proved reserves for the periods indicated are listed below.

We own 100% of the compression facilities and pipeline in the Atlantic Rim area of the Washakie Basin in Wyoming. Any significant change in pipeline or compression operations or other market factors affecting our overall infrastructure facilities could adversely impact our ability to deliver the natural gas we produce to market in an efficient manner, or to obtain adequate natural gas prices. In some cases, we may be required to shut-in wells, at least temporarily, because of a lack of a market or the inadequacy or unavailability of transportation facilities. If that were to occur, we would be unable to realize revenue from those wells until arrangements could be made to deliver our production to market.


	Successor		Predecessor
	Year Ended December 31,		Year Ended December 31,
	2016		2015
Estimated Proved Oil and Natural Gas Reserves:
Net oil reserves (MBbls)		4,732		12,939
Net natural gas reserves (MMcf)		123,816		163,731

Total Net Proved Oil and Natural Gas Reserves (MBoe)		25,368		40,227

Estimated Present Value of Net Proved Reserves (in thousands):
PV-10 Value
Proved developed	$	21,497	$	85,147
Proved undeveloped		6,858		10,876

Total		28,355		96,023
Less: future income taxes, discounted at 10%		—		—

Standardized measure of discounted future net cash flows	$	28,355	$	96,023

Prices Used in Calculating Reserves:
Oil (per Bbl)	$	33.39	$	42.81
Natural Gas (per Mcf)	$	1.59	$	1.74
Proved Developed Reserves (MBoe)		23,127		32,339

542016 and 2017 Capital Expenditure Program

~~Table~~During 2016, we invested $5.0 million in our capital expenditure program. This was substantially below the $36.1 million spent during the course of ~~Contents~~2015 and reflected the Company’s objective to conserve cash. The majority of this investment consisted of infrastructure expenditures in California and other projects designed to sustain production levels as much as possible during the restructuring period.

The Company forecasts a 2017 capital expenditure budget of $8.5 million. Given the continued ~~Insufficient~~downward ~~takeaway~~pressure ~~capacity~~on hydrocarbon prices, most of this commitment will be dedicated to returning existing wells to production and, to a limited degree, development opportunities in ~~the~~our Marcellus Shale ~~could~~field. ~~cause~~The ~~significant~~Company ~~fluctuations~~intends to fund 2017 capital expenditures with cash flows from operations. Of course, we will continue to look for strategic acquisition opportunities in the normal course, but have not designated any of our ~~realized~~ ~~natural~~projected ~~gas~~spending ~~prices~~to that end.

~~The~~Critical ~~Marcellus~~Accounting ~~Shale~~Estimates natural gas business environment has historically been characterized by periods in which production has surpassed local takeaway capacity, sometimes resulting in curtailment of production or substantial discounts in the price received by producers. We expect that a significant portion of our production in the Marcellus Shale will be transported on pipelines that experience a negative differential to NYMEX Henry Hub prices. Should production growth in the Marcellus Shale continue to outpace the increases in takeaway capacity or if we are unable to secure firm takeaway capacity to accommodate our growing production, it could result in substantial discounts in the price we receive for our production, may limit our ability to market our production and could have a material adverse effect on our financial condition and results of operations.

The ~~Acquired~~discussion ~~properties~~and oranalysis ~~businesses~~of ~~may~~our ~~not~~financial ~~produce~~condition asand ~~projected,~~results ~~and~~of weoperations ~~may~~are bebased ~~unable~~upon tothe ~~determine reserve~~consolidated ~~potential~~financial statements, ~~identify~~which ~~liabilities~~have ~~associated~~been prepared in accordance with ~~the~~accounting ~~properties~~principles orgenerally ~~businesses~~accepted orin ~~obtain~~the ~~protection~~United ~~from~~States. ~~sellers~~The preparation ~~against~~of ~~them,~~these ~~which~~financial ~~could~~statements ~~cause~~requires us to ~~incur~~make ~~losses~~estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been

~~One~~33 of our growth strategies is to pursue selective acquisitions of oil and natural gas reserves. We perform a review of the target properties that we believe is consistent with industry practices. However, these reviews may not be completely accurate. Generally, it is not feasible to review in depth every individual property involved in each acquisition. Even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit a buyer to become sufficiently familiar with the properties to fully assess their deficiencies and potential. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable, even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to provide effective contractual protection against all or part of those problems, and we often assume environmental and other risks and liabilities in connection with the properties we acquire.

In addition,Table anyof acquisition involves, among other things, the following potential risks:Contents

The scopeIndex andto costFinancial of these risks may ultimately be materially greater than estimated at the time of the acquisition. Further, our future acquisition costs may be higher than those we have achieved Statements

55 reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. Below, we provide expanded discussion of our more significant accounting policies, estimates and judgments. We believe these accounting policies reflect our more significant estimates and assumptions used in preparation of our consolidated financial statements. See Notes to the Consolidated Financial Statements for a discussion of additional accounting policies and estimates made by management.

~~Table~~Oil ofand ~~Contents~~Gas Producing Activities

~~historically~~We account for our oil and gas activities using the full cost method. As prescribed by full cost accounting rules, all costs associated with ~~Any~~property acquisition, exploration and development activities are capitalized. Exploration and development costs include dry hole costs, geological and geophysical costs, direct overhead related to exploration and development activities and other costs incurred for the purpose of ~~these~~finding ~~factors~~oil ~~could~~and ~~adversely~~gas ~~impact~~reserves. ~~our~~Salaries ~~future~~and ~~growth~~benefits paid to employees directly involved in the exploration and ~~could~~development ~~have~~of oil and gas properties as well as other internal costs that can be specifically identified with acquisition, exploration and development activities are also capitalized. Proceeds received from disposals are credited against accumulated cost except when the sale represents a ~~material~~significant ~~adverse~~disposal ~~effect~~of reserves, in which case a gain or loss is recognized. The sum of net capitalized costs and estimated future development and dismantlement costs are depleted on ~~our~~the ~~business~~equivalent unit-of-production method, ~~financial~~based ~~condition~~on proved oil and ~~results~~gas ofreserves ~~operations~~as determined by independent petroleum engineers.

In accordance with full cost accounting ~~Seasonal~~rules, ~~weather~~Warren ~~conditions~~is subject to a limitation on capitalized costs. The capitalized cost of oil and ~~lease~~gas ~~stipulations~~properties, ~~adversely~~net ~~affect~~of ~~our~~accumulated ~~ability~~depreciation, todepletion ~~conduct~~and ~~drilling~~amortization, may not exceed the estimated future net cash flows from proved oil and gas ~~activities~~reserves indiscounted ~~some~~at 10 percent, plus the cost of unproved properties excluded from amortization, as adjusted for related tax effects. If capitalized costs exceed this limit (the ~~areas~~“ceiling ~~where~~limitation”), the excess must be charged to expense. In 2016, we ~~operate~~recorded an impairment charge of $232. 2 million. In 2015 we recorded an impairment charge of $578.3 million.

~~Oil~~The ~~and~~costs ~~natural~~of ~~gas~~certain ~~operations~~unevaluated inoil ~~Wyoming can be adversely affected by seasonal weather conditions~~ and ~~lease~~gas ~~stipulations~~properties ~~designed to protect various wildlife, the environment~~ and ~~related~~exploratory ~~matters.~~wells ~~Our~~being ~~operations~~drilled ~~in Wyoming~~ are ~~conducted~~not included in ~~areas~~the costs subject to ~~extreme weather conditions and in difficult terrain~~ amortization. ~~Primarily~~Warren inassesses ~~the~~costs ~~winter and~~not ~~spring,~~being ~~our~~amortized ~~operations~~for ~~are~~possible ~~often~~impairments ~~curtailed~~or ~~because~~reductions ofin ~~cold,~~value ~~snow~~ and ~~wet~~if ~~conditions,~~impairments asor ~~well~~a asreduction ~~lease~~in ~~stipulations.~~value Inhas ~~certain areas on federal lands~~occurred, ~~drilling~~the ~~and~~portion ~~other oil and natural gas activities can only be conducted during limited times~~ of the ~~year.~~carrying ~~This~~cost ~~limits our ability to operate~~ in ~~those~~excess ~~areas~~of ~~and~~the ~~can~~current ~~intensify~~value ~~competition~~is ~~during~~transferred ~~those times for drilling rigs, oil field equipment, services, supplies and qualified personnel, which may lead~~ to ~~periodic shortages. These constraints and the resulting shortages or high~~ costs ~~could delay our operations and materially~~ ~~increase~~subject ~~our~~to ~~operating and capital costs, and could have a material adverse effect on our business, financial condition and results of operations~~amortization.

Our estimate of proved reserves is based on the quantities of oil and gas that engineering and geological analysis demonstrate, with reasonable certainty, to be recoverable from established reservoirs in the future under current operating and economic parameters. Reserves and their relation to estimated future net cash flows impact our depletion and impairment calculations. As a result, adjustments to depletion and impairment are made concurrently with changes to reserve estimates. Our reserve estimates and the projected cash flows are derived from these reserve estimates, in accordance with SEC guidelines by an independent engineering firm based in part on data provided by us. The ~~loss~~accuracy of ~~key~~our ~~personnel~~reserve ~~could~~estimates ~~adversely~~depends ~~affect~~in ~~our~~part ~~business~~on the quality and quantity of available data, the interpretation of that data, the accuracy of various mandated economic assumptions, and the judgments of the individuals preparing the estimates.

WeRevenue ~~depend~~Recognition to a large extent on the efforts and continued employment of our executive management team and other key personnel. The loss of the services of our key personnel could adversely affect our business, and we do not maintain key man insurance on the lives of these persons.

~~Our drilling~~Oil ~~success~~ and ~~the~~gas ~~success~~sales ofresult ~~other~~from ~~activities~~undivided ~~integral~~interests toheld ~~our~~by ~~operations~~us ~~will depend,~~ in ~~part,~~various onoil ~~our ability to attract~~ and ~~retain~~gas ~~experienced geologists, engineers, landmen and other professionals~~properties. ~~Competition~~ ~~for~~Sales ~~many~~ of ~~these~~natural ~~professionals~~gas isand ~~intense.~~oil Ifproduced weare recognized ~~cannot~~when ~~retain~~delivered ~~our~~to ~~technical personnel~~ or ~~attract~~picked ~~additional~~up ~~experienced~~by ~~technical~~the ~~personnel~~purchaser. ~~and~~Warren ~~professionals,~~accrues ~~our~~for ~~ability~~revenue tobased ~~compete could~~on beestimated ~~significantly~~pricing ~~impaired~~and production.

AResults ~~payment default under or an acceleration~~ of ~~our indebtedness could result in an event of default~~ ~~and~~Operations ~~acceleration of other indebtedness.~~

InThree ~~light~~Months ofEnded ~~prevailing oil prices and the necessity of a debt restructuring, Warren elected to not make the approximately $7.5~~December ~~million interest payment due February 1~~31, 2016 onand ~~its~~Nine ~~Senior~~Months ~~Notes.~~Ended ~~The applicable~~ September 30~~-day grace period for such interest payment has expired~~, ~~and~~2016 ~~consequently~~Compared 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 Senior Notes the right to ~~declare~~ the ~~entire~~Year ~~principal~~Ended ~~amount of the Senior Notes plus accrued and unpaid interest due and payable. In addition~~December 31, ~~this status has resulted in events of default under Warren's Credit~~ ~~Facilities,~~2015 entitling the administrative agents and lead lenders thereunder to declare all obligations under the Credit Facilities to be immediately due and payable. However, thus far, no such acceleration of Warren's debt obligations has occurred.

~~Although Warren~~Revenues 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.

WeOil ~~do not insure against all potential operating risks. We may incur substantial losses~~ and beGas ~~subject~~Revenues ~~to substantial liability claims as a result of various lawsuits, which may not be fully covered by our insurance.~~

~~Our~~Revenue ~~insurance~~from ~~coverage~~oil ~~does~~and ~~not~~gas ~~cover~~sales ~~all~~were ~~potential~~$16.9 million ~~risks~~and $39.7 million for the three months ended December 31, 2016 ~~losses~~(Successor) and the nine months ended September 30, ~~costs~~2016 (Predecessor), orrespectively. ~~liabilities~~This represents a year over year decrease of $27.1 million Weor ~~ordinarily~~32% ~~maintain~~when ~~insurance~~compared ~~against~~to oil and gas sales of $83.7 million for the year ended ~~various~~December 31, ~~losses~~2015 (Predecessor). This decrease results from a 19% reduction in production from both oil and ~~liabilities~~gas ~~arising~~as well as a 17% reduction in realized price. The average realized price of oil on a year over year basis dropped from ~~our~~$41.14/bbl ~~operations~~in 2015 to $34.09/bbl in ~~accordance~~2016. ~~with~~Additionally the average realized gas prices dropped from $1.55/mcf in 2015 to $1.30 in 2016.

5634

customary industryIndex practices and in amounts that management believes to beFinancial prudent. Losses and liabilities arising from uninsured and underinsured events or in excess of existing insurance coverage could have a material adverse effect on our business, financial condition or results of operations. Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. Our operations could be subject to earthquakes, mudslides, fires, power shortages, telecommunications failures, water shortages, floods, hurricanes, extreme weather conditions and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured for these types of occurrences. The occurrence of any of these business disruptions could seriously harm our revenue and financial condition and increase our costs and expenses. A substantial portion of our oil properties and operations are located in southern California near major earthquake faults. Our revenues and income could be adversely affected if our operations in these locations are disrupted for any reason, including natural disasters or environmental, public health, or political issues. The ultimate impact of being located near major earthquake faults and being consolidated in certain geographical areas is unknown, but our revenue, profitability and financial condition could suffer in the event of a major earthquake or other natural disaster. Statements

~~Our oil~~Transportation ~~and~~Revenue natural gas exploration and production activities are subject to numerous hazards and risks associated with drilling for, operating, producing and transporting oil and natural gas, and any of these risks can cause substantial losses resulting from:

~~Any of~~We ~~these~~receive ~~risks~~fees ~~could~~for ~~have~~transporting agas ~~material~~through ~~adverse effect on~~ our ~~ability~~Atlantic toRim ~~conduct~~intrastate ~~operations~~pipeline, orwhich ~~result~~connects inwith ~~substantial~~the ~~losses~~Wyoming toInterstate usCompany (WIC) System. ~~Many~~Transportation ofrevenue ~~these~~totaled ~~risks~~$1.0 million ~~are~~for ~~not insured because~~ the ~~cost of~~three ~~available~~months ~~insurance,~~ended ~~if any~~December 31, is2016 ~~excessive.~~(Successor) ~~In addition, pollution~~ and ~~environmental risks generally are not fully insurable~~$3.2 million Iffor athe ~~significant~~nine ~~accident~~months orended ~~other event occurs that is not fully covered by insurance~~September 30, it2016 ~~could~~(Predecessor). ~~have~~This represents a ~~material~~year ~~adverse~~over ~~effect~~year ondecrease of ~~our~~10% ~~business,~~when ~~financial~~compared ~~condition~~to ~~and~~transportation ~~results~~revenue of ~~operations~~$4.6 million ~~See~~for ~~"Item 1:~~the ~~Business—Operating~~year ~~Hazards~~ended ~~and~~December 31, ~~Insurance~~2016 (Predecessor)."

~~Competition~~Operating ~~in the oil and natural gas industry is intense, and many of our competitors have greater~~Expenses ~~financial, technological and other resources than we do, which may adversely affect our ability to compete.~~

WeLease ~~operate~~operating inexpenses ~~highly competitive areas of oil~~ and ~~natural~~taxes gas exploration, exploitation, development and acquisition with a substantial number of other companies. We face intense competition from independent, technology-driven companies, as well as from both major and other independent oil and natural gas companies, in each of the following areas:

57Lease operating expense amounted to $10.7 million for the three months ended December 31, 2016 (Successor) and $32.6 million for the nine months ended September 30, 2016 (Predecessor). This represents a year over year reduction of $6.3 million or 13% when compared to lease operating expense of $49.6 million for the year ended December 31, 2015 (Predecessor). This decrease results from cost savings efforts instituted to control operating expenses.

~~Table~~Depreciation, ofdepletion ~~Contents~~and accretion (DD&A)

~~Many of~~DD&A ~~our~~totaled ~~competitors~~$10.8 million ~~have~~for ~~financial,~~the ~~managerial,~~three ~~technological~~months ~~and~~ended ~~other~~December 31, ~~resources~~2016 ~~substantially~~(Successor) ~~greater than ours~~and $18.9 million ~~These~~for ~~companies~~the ~~may~~nine bemonths ~~able~~ended toSeptember 30, ~~pay~~2016 ~~more~~(Predecessor). ~~for~~This ~~exploratory~~represents ~~prospects and~~a ~~productive~~year ~~oil~~over ~~and~~year ~~natural~~reduction ~~gas~~of ~~properties,~~$36.5 million ~~and~~when ~~may~~compared ~~be able~~ to ~~define,~~DD&A ~~evaluate,~~of ~~bid~~$66.2 million for ~~and~~the ~~purchase~~year aended ~~greater~~December 31, ~~number~~2015 (Predecessor). ofDD&A ~~properties~~for ~~and~~the ~~prospects~~three ~~than~~months ~~our~~ended ~~financial~~December 31, or2016 ~~human~~(Successor) ~~resources~~reflects ~~permit. To~~ the ~~extent~~impact ~~our~~of ~~competitors~~restating ~~are~~the ~~able~~Company’s tooil ~~pay~~and ~~more~~gas ~~for~~ properties ~~than~~at wefair ~~are,~~value weunder ~~will~~fresh-start ~~be at a competitive disadvantage~~accounting. ~~Further,~~DD&A ~~many~~for of2016 ~~our~~was ~~competitors~~also ~~may~~significantly less ~~enjoy~~than ~~technological~~2015 ~~advantages~~reflecting ~~and~~the ~~may~~impact ~~be able~~of tolarge ~~implement~~impairments ~~new~~for ~~technologies~~the ~~more~~nine ~~rapidly~~months ~~than~~ended weSeptember 30, ~~can.~~2016 ~~Our~~(Predecessor) ~~ability~~and ~~to explore~~ for ~~oil~~the ~~and~~year ~~natural~~ended ~~gas~~December 31, ~~and~~2015 to(Predecessor). ~~acquire~~In ~~additional~~2017, ~~properties~~DD&A ~~in the future~~ will ~~depend~~continue ~~upon~~to ~~our~~decrease ~~ability~~in comparison to 2016 ~~successfully~~given ~~conduct~~the ~~operations,~~effects ~~implement~~of ~~advanced~~the ~~technologies,~~impairment ~~evaluate~~charge ~~and~~recognized ~~select~~as ~~suitable~~of ~~properties~~December 31, ~~and consummate transactions in this highly competitive environment~~2016.

~~Defects~~Impairment inexpense the title to any of our oil and natural gas interests could result in the loss of some of our oil and natural gas properties or portions thereof, or liability for losses resulting from defects in the assignment of leasehold rights.

WeThe ~~obtain~~Company ~~interests~~recorded inimpairment ~~oil~~expense ~~and~~of ~~natural~~$145.1 million ~~gas~~for ~~properties~~the ~~with~~three ~~varying~~months ~~degrees~~ended ~~of warranty of title~~December 31, ~~such~~2016 as(Successor). ~~general,~~This ~~special or quitclaim~~impairment orreflects ~~without~~the ~~any~~pricing ~~warranty.~~differences Webetween ~~acquired our interests in~~ the ~~WTU in 1999 and 2005 with no title opinion as to~~ first-day-of-the-month ~~interests~~average weprice ~~acquired,~~for ~~which may ultimately prove to be less than~~ the ~~interests we~~ ~~believe~~preceding wetwelve ~~own.~~months ~~The~~required ~~prior~~by ~~owner~~Regulation ~~had~~S-X, ~~acquired~~Rule ~~its~~4-10 ~~interests~~and ~~from~~ASC a932 ~~third~~used ~~party that,~~ in ~~turn,~~calculating ~~had acquired its interest from Exxon Corporation with no warranty of title. Exxon had owned~~ the ~~WTU~~ceiling ~~for over~~test ~~25 years~~and ~~before its sale in 1997. Similarly, when we acquired our interest in~~ the ~~NWU~~forward-looking inprices ~~December~~used ~~2005,~~by weASC ~~had~~852 ~~no title opinion prepared as~~ to ~~the interests acquired. The prior owner had~~estimate ~~owned~~ the ~~NWU~~fair ~~for~~value ~~over~~of ~~15 years, acquired~~ the ~~NWU~~Company’s ~~from~~oil ~~Sun~~and ~~Oil~~gas ~~Corporation,~~properties ~~which~~on ~~had owned~~ the ~~NWU~~fresh-start ~~for~~reporting ~~over~~date, 20September ~~years~~30, ~~before~~2016. ~~its~~The ~~sale~~Company inrecorded ~~1990~~ceiling ~~without~~test ~~warranty~~impairments oftotaling ~~title~~$87.1 million ~~Losses~~for ~~of title to~~ the ~~WTU~~nine ormonths ~~the~~ended ~~NWU may result from title defects~~September 30, ~~title issues or from ownership of a lesser interest than we believe we acquired~~2016 (Predecessor). InThese ~~other~~impairments ~~instances,~~were ~~title~~driven ~~opinions~~by ~~may~~decreases ~~not~~in becommodity ~~obtained~~prices ifused in ~~our discretion~~the itceiling ~~would~~test becalculation ~~uneconomical~~since orDecember 31, ~~impractical to do so~~2015. ~~Furthermore,~~We inrecorded ~~certain~~ceiling ~~instances~~test weimpairments ~~may~~totaling ~~determine~~$578.3 million tofor ~~purchase~~the ~~properties~~year ~~even~~ended ~~though certain technical title defects exist if we believe~~December 31, it2015 ~~to be an acceptable risk under the circumstances~~(Predecessor). ~~These~~The ~~situations~~impairments ~~increase~~in ~~the~~2015 ~~possible~~were ~~risk~~driven ofby ~~loss~~decreases ~~and~~in ~~could~~commodity ~~potentially~~prices ~~result~~used in ~~total~~the ~~loss~~ceiling oftest ~~title~~calculation tosince ~~some~~December 31, ~~or all of the properties we purchased~~2014.

~~Prospects~~Transportation ~~that~~expense ~~we decide to drill may not yield oil or natural gas in commercially viable quantities.~~

APipeline ~~prospect~~operating isexpenses atotaled ~~property~~$0.5 million onfor ~~which~~the wethree ~~have~~months ~~identified~~ended ~~what our geoscientists believe~~December 31, ~~based~~2016 on(Successor) ~~available seismic~~ and ~~geological information, to be indications of oil or natural gas~~$1.0 million ~~Our~~for the ~~prospects~~nine ~~are~~months inended ~~various stages of evaluation~~September 30, ~~and~~2016 ~~range~~(Predecessor). ~~from~~This arepresents ~~prospect that is ready to drill to~~ a ~~prospect~~year ~~that~~over ~~will~~year ~~require~~reduction ~~substantial additional geological or seismic data processing and interpretation~~$0.2 million ~~However,~~when ~~the~~compared ~~use of seismic data and other technologies and the study of producing fields in the same area will not enable us~~ to ~~know~~ ~~conclusively,~~transportation ~~prior~~expense tofor drilling and testing, whether natural gas or oil will be present or, if present, whether oil or natural gas will be present in sufficient quantities to recover drilling or completion costs or be economically viable. If we drill wells in our current and future prospects that are identified as non-economic wells or dry holes, our drilling success rate may decline and materially harm our business. In sum, the ~~cost~~year ofended ~~drilling~~December 31, ~~completing~~2015 ~~and operating any wells is often uncertain and new wells may not be productive~~(Predecessor).

AsGeneral ~~co-venturer~~and inadministrative ~~joint~~expense ~~ventures,~~(G&A weexpense) ~~are liable for various obligations of those joint ventures.~~

WeG&A ~~have~~expense ~~entered~~was ~~into~~$3.3 million ~~joint~~for ~~ventures in~~ the ~~past~~three ~~and~~months ~~may~~ended doDecember 31, so2016 ~~again~~(Successor) inand ~~the future~~$8.9 million ~~As a co-venturer, we are contingently liable~~ for the ~~obligations~~ ofnine ~~the~~months ended ~~joint venture~~September 30, ~~including~~2016 ~~responsibility~~(Predecessor). ~~for~~This ~~day-to-day~~represents ~~operations~~a ~~and~~$5.5 million ~~liabilities~~or ~~which~~31% ~~cannot~~reduction bein ~~repaid~~G&A ~~from~~expense ~~joint~~of ~~venture~~$17.7 million ~~assets,~~for ~~insurance~~the ~~proceeds~~year orended ~~indemnification~~December 31, by2015 ~~others~~(Predecessor). In ~~the~~This ~~future,~~reduction wereflects ~~might~~management’s becost savings ~~exposed~~efforts to ~~litigation~~control inG&A ~~connection~~expense.

58Reorganization items

~~Table~~The Company incurred restructuring expenses of ~~Contents~~$14.2 million for the nine months ended September 30, 2016 (Predecessor). These amounts consist of legal and professional fees associated with the Chapter 11 Cases.

~~with joint~~35 venture activities, or find it necessary to advance funds on behalf of joint ventures to protect the value of the oil and natural gas properties by drilling wells to produce undeveloped reserves or to pay lease operating expenses in excess of production. These activities may have a material adverse effect on our business, financial condition and results of operations

OurTable role as co-venturer in joint ventures may result in conflicts of interest, which may not be resolved in our best interests or the best interests of our investors. Contents

WeIndex haveto enteredFinancial into joint ventures in the past and may do so again in the future. Our role as co-venturer in joint ventures may result in conflicts of interest between the interests of those entities and our investors. Any resolution of these conflicts may not always be in our best interests and may have a material adverse effect on our business, financial condition and results of operations. Statements

WeOther ~~have~~Income ~~limited~~(Expense) ~~control over activities on properties we do not operate, which could reduce our production and revenues.~~

AInterest ~~portion~~and ~~of our business activities is conducted through joint operating or~~ other ~~agreements~~income under which we own partial ownership or working interests in oil and natural gas properties. We may not operate all of the properties in which we have an interest and may not have the ability to remove the operator in the event of poor performance. As a result, in such situations, we may be limited in our ability to influence normal operating procedures, expenditures or future development of underlying properties and their associated costs. The failure of an operator of our wells to adequately perform operations, or an operator's breach of the applicable agreements, could reduce our revenues and production. Therefore, the success and timing of our drilling and development activities on properties operated by others depends upon a number of factors outside of our control, including:

Interest and other income amounted to $0.1 million for the three months ended December 31, 2016 (Successor) and $0.5 million ~~Shortages~~for ofthe ~~rigs~~nine months ended September 30, ~~equipment~~2016 (Predecessor). However, ~~supplies~~interest and ~~personnel~~other ~~could~~income ~~delay~~amounted orto ~~otherwise~~$5.6 million ~~adversely~~for ~~affect~~the ~~our cost~~year ofended ~~operations~~December 31, or2015 ~~our~~(Predecessor). ~~ability~~The to2015 ~~operate~~amount ~~according~~primarily pertains to the sale of non-oil and gas property in our ~~business~~North ~~plans~~Wilmington Unit in California.

IfInterest ~~domestic~~expense drilling activity increases, particularly in the fields in which we operate a general shortage of drilling and completion rigs, field equipment and qualified personnel could develop. As a result, the costs and delivery times for rigs, equipment and personnel could be substantially greater than in previous years. From time to time, these costs have sharply increased and could do so again. The demand for and wage rates of qualified drilling rig crews generally rises in response to the increasing number of active rigs in service and could increase sharply in the event of a shortage. Although we own a drilling rig for use in the WTU, shortages of drilling and completion rigs, field equipment or qualified personnel could delay, restrict or curtail our exploration and development operations, which could in turn harm our operating results.

Interest expense totaled $3.6 million for the three months ended December 31, 2016 (Successor). This level of interest expense ~~Failure~~reflects the discontinuance of interest expense on our ~~internal~~Predecessor ~~control~~borrowings ~~over~~that ~~financial~~were ~~reporting~~cancelled ~~could~~as ~~harm~~part of our ~~business~~Chapter ~~and~~11 ~~financial results~~Cases. However, it does include interest expense on our Exit Credit Facility for the three month period.

~~The~~Interest ~~management~~expense ofamounted ~~the~~to ~~Company~~$31.8 million ~~is responsible~~ for ~~establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process that provides reasonable assurance regarding~~ the ~~reliability~~nine ofmonths ~~financial~~ended ~~reporting~~September 30, ~~for~~2016 ~~external~~(Predecessor) ~~purposes~~which inincludes ~~accordance with accounting~~interest ~~principles~~expense ~~generally~~on ~~accepted~~our inFirst ~~the~~Lien ~~United~~Credit ~~States of America. Internal control over financial reporting includes maintaining records that~~Facility, inSecond ~~reasonable~~Lien ~~detail,~~Credit ~~accurately~~Facility and ~~fairly~~Senior ~~reflect~~Notes. ~~the Company's transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of the financial statements; providing reasonable assurance that receipts and~~

59Interest expense amounted to $30.4 million for the year ended December 31, 2015 (Predecessor). This excludes $8.8 million of capitalized interest associated with the development of the Marcellus Assets.

~~Table~~Gain of(Loss) ~~Contents~~on financial instruments

~~expenditures are~~The ~~made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of the~~ Company ~~assets~~recorded ~~that could have~~ a ~~material effect~~loss on ~~the~~derivative financial ~~statements~~instruments ~~would~~of ~~be prevented or detected on a timely basis~~$10.9 million ~~Because~~during ofthe ~~its~~three ~~inherent~~months ~~limitations~~ended December 31, ~~internal control over financial reporting is not intended to provide absolute~~2016 ~~assurance~~(Successor). ~~that~~This aconsisted ~~misstatement~~ of ~~our~~an ~~financial~~unrealized ~~statements~~loss ~~would~~on bethe ~~prevented~~change orin ~~detected. Failure~~ mark-to-market ~~maintain~~valuations ~~an effective system~~ of ~~internal~~$10.2 million ~~control over financial reporting could limit our ability to report our financial results accurately~~ and ~~timely,~~a orrealized toloss ~~detect~~on ~~and~~cash ~~prevent~~settlements ~~fraud~~of $0.7 million.

WeThe ~~make~~Company ~~estimates~~recorded ~~and~~a ~~assumptions~~gain inon ~~connection~~derivative ~~with~~financial ~~the~~instruments ~~preparation~~ of ~~our~~$0.8 million ~~Consolidated~~during ~~Financial~~the nine months ended ~~Statements~~September 30, ~~and~~2016 ~~any~~(Predecessor). ~~changes~~This toconsisted ~~those~~of ~~estimates~~an ~~and~~unrealized ~~assumptions~~loss ~~could~~on ~~have~~the achange ~~material~~in ~~adverse~~mark-to-market ~~effect~~valuations onof ~~our~~$10.9 million ~~results~~and a realized gain on cash settlements of ~~operations~~$11. 7 million.

InThe ~~connection~~Company ~~with~~recorded ~~the~~a ~~preparation~~gain ~~of our Consolidated Financial Statements, we use certain estimates and assumptions based~~ on ~~historical~~ ~~experience~~derivative ~~and~~financial ~~other~~instruments ~~factors. Our most critical accounting estimates are described in "Management's Discussion and Analysis~~ of ~~Financial Condition and Results of Operations" in this report~~$20. ~~In addition, as discussed in Note~~1 Amillion tofor the ~~Consolidated~~year ended ~~Financial Statements~~December 31, we2015 ~~make certain estimates, including decisions related to provisions for legal proceedings and other contingencies~~(Predecessor). ~~While~~ weThis ~~believe~~consisted ~~that~~of ~~these~~an ~~estimates~~unrealized ~~and~~gain ~~assumptions~~on ~~are reasonable under~~ the ~~circumstances,~~change ~~they~~in ~~are subject~~ mark-to-market ~~significant~~valuations ~~uncertainties, some~~ of ~~which are beyond our control~~$13.0 million ~~Should any of these estimates~~ and ~~assumptions change or prove to be incorrect, it could have~~ a ~~material~~realized ~~adverse~~gain ~~effect~~ on cash ~~our~~settlements ~~results~~ of ~~operations~~$7.1 million.

~~Computer~~Loss ~~security~~on ~~breaches~~contingent ~~and~~consideration ~~other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.~~

InThe ~~the~~Company ~~ordinary~~recorded ~~course~~a loss of ~~our business, we collect and store sensitive data in our computer data centers and networks~~$0.4 million ~~This~~from ~~data includes~~the ~~intellectual~~contingent ~~property,~~consideration ~~our~~related ~~proprietary~~to ~~business~~the ~~information,~~acquisition ~~lists~~ of ~~customers, suppliers and business partners, information concerning~~ our ~~oil~~Marcellus ~~and~~Assets ~~natural~~for ~~gas lessors and minerals, royalty~~the ~~and~~nine ~~working~~months ~~interest~~ended ~~owners~~September 30, as2016 ~~well as our employees~~(Predecessor). ~~The secure processing~~Additionally, ~~maintenance~~a ~~and~~loss ~~transmission~~ of ~~this information is critical to our operations~~$0.5 million ~~Despite~~was ~~our~~incurred ~~security~~for ~~measures,~~the ~~our information~~year ~~technology~~ended ~~and infrastructure may be vulnerable to attacks by hackers or breached due to employee error~~December 31, ~~malfeasance~~2015 ~~or other disruptions~~(Predecessor). ~~Any~~This ~~such~~amount ~~breach~~reflects ~~could compromise our networks and~~ the ~~information~~fair ~~stored~~value ~~there~~adjustment ~~could~~for bethe ~~accessed,~~contingent ~~publicly~~consideration payment ~~disclosed,~~as ~~lost~~part ~~or stolen. Any such access, disclosure or other loss~~ of ~~information could result in legal claims or proceedings, liability under laws that protect~~ the ~~privacy~~purchase ~~of personal information, regulatory penalties, a disruption of our operations,~~ and ~~damage~~sale towith ~~our reputation; all of which could adversely affect our business~~Citrus.

Gain on ~~Risks~~debt ~~Relating~~extinguishment ~~to Ownership of Our Common Stock~~

IfA we$14.4 million ~~are~~gain ~~unable~~from ~~to comply with~~ the ~~NASDAQ~~retirement ~~minimum~~of ~~share~~debt ~~price~~related ~~requirement~~to orthe ~~continue~~exchange toof ~~meet NASDAQ's~~previously ~~other~~issued ~~continued~~Senior ~~listing~~Notes ~~requirements,~~for ~~NASDAQ~~term ~~may~~notes ~~delist~~under ~~our~~the ~~common~~First Lien ~~stock,~~Credit ~~which~~Facility ~~could~~was ~~materially~~recorded ~~impair~~for the ~~liquidity~~year ~~and~~end ~~value~~December 31, of2015 ~~our common stock~~(Predecessor).

~~Our~~Troubled ~~common~~debt ~~stock~~restructuring isexpense currently listed on NASDAQ. In 2015, the closing price of our common stock ranged between a high of $1.63 per share on January 2, 2015 and a low of $0.14 per share on December 23, 2015. On June 24, 2015, we received a deficiency letter from the Listing Qualifications Department of The NASDAQ Stock Market (the "Staff") notifying the Company that, for the 30 consecutive business days preceding June 24, 2015, the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on NASDAQ pursuant to NASDAQ Listing Rule 5450(a)(1) ("Rule 1"). In accordance with the NASDAQ Listing Rules, the Company was provided 180 calendar days, or until December 21, 2015, to regain compliance with Rule 1, during which time it would be required to maintain a closing bid price of at least $1.00 for a minimum of 10 consecutive business days.

60Troubled debt restructuring expense of $4.0 million was recognized during the year ended December 31, 2015 (Predecessor). This resulted from the exchange of previously issued Senior Notes for term notes under the Second Lien Credit Facility. This transaction was accounted for as a troubled debt restricting in accordance with ASC 470.

~~Table~~Contractual ofObligations ~~Contents~~

WeLeases were unable to regain compliance with Rule 1 by December 21, 2015. Accordingly, on December 22, 2015, the Company received a letter from the Staff notifying it that the Company's common stock would be subject to delisting from NASDAQ unless the Company timely requested a hearing before a NASDAQ Listing Qualifications Panel (the "Panel").

~~In addition,~~The ifCompany ~~our~~leases ~~common~~corporate ~~stock~~office ~~price~~space ~~falls~~in ~~further~~Denver, ~~below~~Colorado ~~the~~on ~~$1.00~~a ~~threshold~~month to ~~the~~month ~~point~~status. ~~where~~The ~~NASDAQ~~Company ~~considers~~leases ~~the~~oil ~~stock~~and ~~price~~gas administrative tooffices belocated ~~"abnormally~~in ~~low~~Dallas," ~~NASDAQ~~Texas ~~has~~which ~~the~~expires ~~discretion~~in ~~to begin~~April, ~~delisting proceeding immediately with respect to our common stock~~2022. ~~There~~The isCompany noleases ~~formal~~field ~~definition~~office ofspace ~~"abnormally low"~~ in ~~NASDAQ~~Rawlins, ~~rules.~~

~~On February 18,~~36 2016, we received an additional deficiency letter from the Staff notifying the Company that for the last 30 consecutive business days the market value of the Company's publicly held shares has been below the minimum $15 million market value of publicly held shares requirement for continued listing on NASDAQ as set forth in NASDAQ Listing Rule 5450(b)(3)(C) ("Rule 2) . In accordance with the NASDAQ Listing Rules, The Company has been provided a grace period of 180 calendar days, through August 16, 2016, to evidence compliance with Rule 2. In order to satisfy Rule 2, the Company must evidence a market value of publicly held shares of at least $15 million for a minimum of 10 consecutive business days. Failure to regain compliance with Rule 2 could result in a transfer of our listing or the delisting of our common stock.

On March 7,Table 2016, we received a decision letter from the the Panel indicating that the Company's common stock is permitted to continue to trade on the Nasdaq Global Market through June 20, 2016. The continued listing of the Company's common stock is contingent on the Company (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 the Company that, if the Company 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 the Company's common stock. Contents

A transferIndex of our listing to anotherFinancial market or having our common stock trade on the bulletin board or the "pink sheets," either as result of a failure to regain compliance with NASDAQ's continued listing requirements or the Company's failure to satisfy other qualitative or quantitative standards for continued listing on NASDAQ, could negatively impact us by, among other things, reducing the liquidity and market price of our common stock, reducing the number of investors willing to hold or acquire our common stock, and limiting our ability to issue additional securities or obtain additional financing in the future. We may also face other material adverse consequences in such event, such as negative publicity, diminished investor, customer, and/or employee confidence, and the loss of business development opportunities, some or all of which may contribute to a further decline in our stock price. Statements

Wyoming which is on a month to month status. The ~~number~~Company ofleases ~~shares~~office ~~eligible~~space ~~for~~in ~~future~~Long ~~sale~~Beach, orCalifornia which ~~have~~expires ~~registration~~in ~~rights~~November ~~could~~2018. ~~adversely~~The Company leases office space in Tunkhannock, Pennsylvania ~~affect~~which ~~the~~expires ~~future~~in ~~market~~August ~~for~~2019. ~~our~~The ~~common~~Company ~~stock~~leases office space in Casper, Wyoming on a month to month status.

~~Sales~~Transportation ~~of substantial amounts of previously restricted shares of our common stock in the public market, or the perception that these~~Fee ~~sales may occur, could cause the market price of our common stock to decline, or could impair our ability to raise capital through the sale of additional common or preferred stock.~~

As Contracts assumed related to the Marcellus assets stipulated that the Company pay a fixed monthly amount of ~~December 31~~$1,241,000 ~~2015~~for transportation of gas through the interstate pipeline, weup ~~had~~to 85120,~~203,466~~000 ~~shares~~dekatherms ofper ~~common~~day ~~stock~~for ~~issued~~a term ending in July 2022 (67 months remain on the contract). If the Company exceeds 120,000 43dekatherms per day,~~423~~ ~~shares~~the agreement states that a monthly fee of ~~common~~$0.34 ~~stock~~per ~~were~~dekatherm ~~issuable~~over ~~upon~~the ~~conversion~~contractually ofstipulated ~~our~~amount ~~convertible~~should ~~debt~~be ~~and~~paid. ~~convertible preferred~~Following ~~stock~~the emergence from bankruptcy in October 2016, 3the commitment was reduced to 90,~~593,589~~000 ~~shares~~dekatherms per day for the next 36 months of ~~common~~the ~~stock~~contract. ~~were~~Warren accounts ~~issuable~~for ~~upon~~the ~~exercise~~aforementioned gathering and transportation fees on the Consolidated Statements of ~~outstanding~~Operations ~~options,~~within the lease operating expenses and 1taxes line item,~~277,468~~ as incurred. No overage fees have been included in the calculation of transportation fees.

61Long-term debt and interest obligations

~~Table~~On the Effective Date, pursuant to the Plan, the Company entered into a Credit Agreement by and among the Company, Wilmington Trust, National Association, as Administrative Agent (the “Agent”), and the lenders from time to time party thereto (the “Credit Agreement”). The Credit Agreement provides for a $150 million term loan facility (the “Exit Credit Facility”), consisting of ~~Contents~~initial senior secured term loans in an aggregate principal amount of $130 million (which, pursuant to the Plan, is deemed to be outstanding without any advancement of funds by the lenders under the Credit Agreement) and additional senior secured term loans (the “delayed draw term loans”) in an aggregate principal amount of up to $20 million, which, subject to the conditions set forth in the Credit Agreement, may be drawn from time to time by the Company. The outstanding balance of the Exit Credit Facility at December 31, 2016 amounted to $140.3 million which includes $0.3 million of paid-in-kind interest. The maturity date under the Credit Agreement (the “Maturity Date”) is May 22, 2020.

~~shares of~~The ~~restricted~~interest ~~stock~~rate ~~are~~on ~~issuable~~borrowings ~~upon~~under ~~vesting.~~the ~~Pursuant~~Exit toCredit aFacility ~~registration~~will ~~rights~~be ~~agreement~~equal to ~~which~~the wesum ~~are~~of ~~party~~(i) the ~~with~~LIBOR ~~Citrus,~~rate ~~Citrus~~(with ~~may~~a ~~require~~minimum usLIBOR torate of ~~file~~1%) ~~one~~plus or9.0% per ~~more~~annum ~~prospectus~~on ~~supplements to~~ the ~~registration~~aggregate ~~statement~~outstanding onprincipal ~~Form S-3~~amount weof ~~have~~the ~~filed~~loans ~~with~~outstanding, ~~the~~which ~~SEC~~shall ~~for~~be ~~the~~paid ~~resale~~in ~~of shares~~cash, ~~and~~plus ~~any~~(ii) an ~~shares~~amount ~~sold~~equal ~~pursuant~~ to ~~such~~1.0% per ~~prospectus~~annum ~~supplements~~on ~~would~~the ~~become~~aggregate ~~eligible~~outstanding ~~for~~principal ~~sale~~amount ~~without restriction~~of bythe ~~persons~~loans outstanding, ~~other~~which ~~than~~shall ~~our~~be ~~affiliates.~~paid-in-kind ~~Additionally, our directors~~ and ~~executive~~added ~~officers,~~to ~~beneficially~~the ~~hold~~outstanding ~~approximately~~principal 6%amount of the ~~outstanding~~loans ~~shares~~on ofeach ~~our~~quarterly ~~common~~interest ~~stock~~payment date. IfOther ~~our stockholders~~than ~~sell~~with ~~significant~~respect ~~amounts~~to prepayments ofor ~~common~~during ~~stock~~periods in ~~any~~which ~~public~~the ~~market~~outstanding ~~that~~principal ~~develops~~amount orof ~~exercise~~the ~~their~~loans ~~registration rights~~ and ~~sell~~other aobligations ~~large~~under ~~number~~the ofExit ~~shares,~~Credit ~~the~~Facility ~~price~~is ofsubject ~~our~~to ~~common~~an ~~stock~~increased ~~could~~interest ~~be negatively~~rate ~~affected.~~following Ifthe weoccurrence ~~were~~of toan ~~include~~event ~~shares~~of ~~held~~default byunder ~~those~~the ~~holders~~Credit Agreement, ininterest aon ~~registration~~each ~~statement~~loan ~~pursuant~~under to the ~~exercise~~Exit ofCredit ~~their~~Facility ~~registration~~shall ~~rights,~~be ~~those~~due ~~sales~~and ~~could~~payable ~~impair~~on ~~our~~the ~~ability~~next to ~~raise needed~~last ~~capital~~business byday ~~depressing~~of ~~the~~each ~~price~~March, atJune, ~~which~~September weand ~~could~~December ~~sell~~and ~~our~~on ~~common~~May 22, ~~stock~~2020, orthe ~~impede~~Maturity ~~such~~Date anunder ~~offering~~the ~~altogether~~Credit Agreement.

~~Our~~Asset ~~stock~~Retirement ~~price~~Obligations ~~has been and may be volatile, and your investment in our stock could decline in value.~~

InOur ~~recent~~obligations ~~years,~~result from the ~~stock~~acquisition, ~~market~~construction ~~has~~or ~~experienced~~development ~~significant~~and ~~price~~the ~~and~~normal ~~volume~~operation ~~fluctuations~~of out long-lived assets. The ~~Our~~estimated fair ~~common~~value ~~stock~~of ~~has~~the ~~experienced~~future costs associated with dismantlement, abandonment and ~~may continue~~restoration toof ~~experience~~oil ~~volatility~~and ~~that~~gas properties is ~~not~~recorded ~~related~~generally toupon ~~our~~acquisition ~~operating~~or ~~performance~~completion ~~for~~of ~~reasons~~a ~~that~~well. At ~~include:~~December 31, 2016, a liability of $34.9 million was recorded as a long-term liability in the consolidated financial statements.

~~Many of~~Bankruptcy ~~these~~Claims factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. We cannot assure that the market price of our common stock will not fluctuate or decline significantly in the future. In addition, the stock markets in general can experience considerable price and volume fluctuations.

62Associated with the Company’s filing and emergence from the Chapter 11 Cases, creditors have filed claims against the Company. The claims reconciliation process is ongoing and the estimated liability has not been finalized. The process includes review of the underlying claim filed against the Company and a reconciliation against the debtor’s books and records.

~~Table~~The ofCompany ~~Contents~~has estimated the liabilities associated with these claims at $1.5 million. This liability is included as a current liability in the consolidated financial statements at December 31, 2016.

~~Provisions~~Recent inAccounting ~~our~~Pronouncements ~~articles of incorporation, bylaws and Maryland law may make it more difficult to effect a change in control, which could adversely affect the price of our common stock.~~

~~Provisions~~A indetail ~~our articles~~ of ~~incorporation,~~recent ~~bylaws~~accounting ~~and~~pronouncements ~~Maryland~~can ~~law could make it more difficult for a third party to acquire us, even if doing so would~~ be ~~beneficial~~found ~~to our stockholders. We may issue shares of preferred stock~~ in ~~the~~Note ~~future~~A ~~without~~– ~~stockholder~~Organization ~~approval~~on ~~and~~Accounting ~~upon such terms as our board of directors may determine~~Policies. Our issuance of this preferred stock could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding stock, and could potentially prevent the payment of a premium to stockholders in an acquisition.

~~Our articles~~Off-Balance ofSheet ~~incorporation~~Arrangement ~~and bylaws contain provisions that could delay, defer or prevent a change in control of us or our management. These provisions include:~~

~~These provisions~~The ~~also~~Company ~~could~~does ~~discourage~~not ~~proxy~~have ~~contests~~any ~~and~~off-balance ~~make~~sheet ~~it more difficult for our stockholders to elect directors and take other corporate actions~~arrangements. As a result, these provisions could make it more difficult for a third party to acquire us, even if doing so would benefit our stockholders, and could limit the price that investors are willing to pay in the future for shares of our common stock.

~~We are~~37 also subject to provisions of the Maryland General Corporation Law that prohibit business combinations with persons owning 10% or more of the voting shares of a corporation's outstanding stock, unless the combination is approved by the board of directors prior to the person owning 10% or more of the stock, for a period of five years after which the business combination would be subject to special stockholder approval requirements. This provision could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company, or may otherwise discourage a potential third party from attempting to obtain control from us, which in turn could have a material adverse effect on the market price of our common stock.

WeTable haveof not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. Contents

UnderIndex the terms of our convertible preferred stock, we may not pay dividends on our common stock unless all accrued dividends on our convertible preferred stock have been paid. We anticipate that we will retain all future earnings and other cash resources for the future operation and development of our business. Accordingly, we do not intend to declareFinancial or pay any cash dividends on our common stock in the foreseeable future. Payment of any future dividends will be at the discretion of our board of directors after taking into account many factors, including our operating results, financial conditions, current and anticipated cash needs, and plans for expansion. Statements

Item 1B 7A: ~~Unresolved~~ ~~Staff~~Quantitative ~~Comments.~~ and Qualitative Disclosures About Market Risk

~~None~~The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term “market risk” refers to the risk of loss arising from adverse changes in natural gas and oil prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk sensitive instruments were entered into for purposes other than speculative trading.

63Commodity Risk

~~Table~~Our primary market risk exposure is in the price we receive for our natural gas and oil production. Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot regional market prices applicable to our U.S. natural gas production. Pricing for natural gas and oil production has been volatile and unpredictable for several years, and we expect this volatility to continue in the future. The prices we receive for production depend on many factors outside of ~~Contents~~our control, including volatility in the differences between product prices at sales points and the applicable index price.

We have entered into several commodity derivative contracts to hedge our exposure to commodity price risk associated with anticipated future ~~Item 2: Properties~~ oil and gas production. We believe we will have more predictability of our crude oil and gas revenues as a result of these derivative contracts.

AThe ~~description~~following oftable summarizes our ~~properties~~open isfinancial ~~included~~derivative inpositions ~~Items 1~~as ~~and~~of 2.December 31, ~~Business~~2016 ~~and~~related ~~Properties~~to ~~above~~oil and isgas ~~incorporated herein by reference~~production.

We believe that we have satisfactory title to the properties owned and used in our business, subject to customary liens for taxes not yet payable, liens incident to minor encumbrances, liens for credit arrangements, and easements and restrictions that do not materially detract from the value of the properties, our interests in the properties, or the use of the properties in our business. We believe our properties are adequate and suitable for us to conduct business in the future.

Product

Type

Contract Period

Volume

Price per
Mcf or Bbl

BRENT Oil

Collar

01/01/17 - 12/31/17

250 Bbl/d

42.00 – 57.25

BRENT Oil

Collar

01/01/17 - 12/31/18

250 Bbl/d

42.00 – 60.00

BRENT Oil

Collar

01/01/17 - 12/31/18

250 Bbl/d

42.00 – 60.50

BRENT Oil

Collar

01/01/17 - 12/31/18

250 Bbl/d

43.00 – 61.50

BRENT Oil

Collar

01/01/17 - 12/31/18

250 Bbl/d

42.00 – 59.60

BRENT Oil

Swap

01/01/17 - 12/31/17

100 Bbl/d

55.30

BRENT Oil

Swap

01/01/17 - 12/31/17

250 Bbl/d

56.25

CIG Basis

Swap

01/01/17 - 03/31/19

7,500 MMBtu/d

(0.36

)

DTI Basis

Swap

01/01/17 - 03/31/17

10,000 MMBtu/d

(0.86

)

DTI Basis

Swap

01/01/17 - 03/31/19

10,000 MMBtu/d

(0.98

)

DTI Basis

Swap

01/01/17 - 03/31/19

10,000 MMBtu/d

(1.04

)

NYMEX Gas

Collar

01/01/17 - 12/31/17

15,000 MMBtu/d

2.80 – 3.10

NYMEX Gas

Collar

01/01/17 - 12/31/18

10,000 MMBtu/d

2.80 – 3.15

NYMEX Gas

Collar

01/01/18 - 12/31/18

10,000 MMBtu/d

2.80 – 3.30

NYMEX Gas

Swap

01/01/17 - 03/31/18

10,000 MMBtu/d

3.56

NYMEX Gas

Swap

01/01/17 - 07/31/17

5,000 MMBtu/d

3.55

Under a swap contract, the counterparty is required to make a payment to us if the index price for any ~~Item 3: Legal~~settlement ~~Proceedings~~ period is less than the fixed price, and we are required to make a payment to the counterparty if the index price for any settlement period is greater than the fixed price.

OnInterest ~~November 3,~~Rate ~~2014,~~Risk Warren E&P was named as a defendant in a lawsuit in the Los Angeles County Superior Court, captioned Brandt Haas v. Warren E&P, Inc., Case No. BC562435, involving a claim disputing royalty payments made from the Company's operation at the Wilmington Townlot Unit. The plaintiff seeks to certify a class of all Wilmington Townlot Unit royalty owners who have received royalty payments since November 2010. The Company filed a Demurrer to plaintiff's complaint in June 2015, principally on the grounds that the complaint failed to identify the contract or contracts giving rise to the plaintiff's claims. The court granted the Company's Demurrer on December 1, 2015. The plaintiff filed an amended complaint on December 21, 2015, alleging that he and each of the putative class members have one or more contracts with the defendant for the payment of royalties. Plaintiff alleges that the Company breached those contracts by excessively deducting from royalty payments improper fees, costs or expenses. The plaintiff also alleges causes of action for unjust enrichment and a violation of the California Unfair Competition Act, both based solely upon the Company's alleged breach of contract. On January 29, 2016, Warren filed an answer, along with a counterclaim seeking to recover from plaintiff any expenses incurred that properly should have been charged against royalty payments but were not charged. Warren is preparing and expects to file in mid-April 2016 a motion for summary adjudication, seeking a ruling that it was appropriate for defendant to recoup from royalty payments amounts owed by royalty owners. Discovery has been stayed pending this filing, and the Company is unable to estimate a possible loss, or range of possible loss, if any, in this case.

~~We are~~At ~~party~~December 31, to2016, awe ~~variety~~had debt outstanding under our Exit Credit Facility of ~~legal,~~$140.3 million. ~~administrative,~~The ~~regulatory~~annual ~~and~~interest ~~government~~rate ~~proceedings,~~on borrowings ~~claims~~under ~~and~~the ~~inquiries~~Exit ~~arising~~Credit inFacility is the ~~normal~~sum ~~course~~of (i) the LIBOR rate (with a minimum LIBOR rate of ~~business~~1%) plus 9.0% ~~While~~per annum on the ~~results~~aggregate outstanding principal amount of ~~these proceedings,~~the ~~claims~~loans ~~and~~outstanding, ~~inquiries~~which ~~cannot~~shall be ~~predicted~~paid ~~with~~in ~~certainty~~cash, ~~management~~plus (ii) an ~~believes~~amount ~~that~~equal to 1.0% per annum on the ~~ultimate~~aggregate ~~outcome~~outstanding principal amount of ~~such~~the ~~matters~~loans ~~will~~outstanding, ~~not~~which ~~have~~shall abe ~~material~~paid-in-kind ~~effect~~and added to the outstanding principal amount of the loans on each quarterly interest payment date. At present, the interest rate is 11%. During 2016, the Company's ~~financial~~incurred ~~condition or~~$3.5 million ~~results~~of interest under the Exit Credit Facility of ~~operations~~which approximately $0. 1 million of interest was accrued at December 31, 2016.

38 ~~Item 4: Mine Safety Disclosures~~

NotTable applicable.of Contents

64Index to Financial Statements

~~Table~~Financial ofInstruments ~~Contents~~

Our financial instruments consist of cash and cash equivalents, collateral security accounts, derivatives and other long-term liabilities. The carrying amounts of cash and cash equivalents approximate fair market value due to the highly liquid nature of these short-term instruments or they are reported at fair value. Derivatives and other long-term liabilities are recorded at the ~~PART~~approximate II fair value of such items.

Inflation ~~Item 5: Market for the Registrant's Common Equity, Related Stockholder Matters~~ and ~~Issuer~~Changes ~~Purchases~~in ofPrices ~~Equity Securities~~

The general level of inflation affects our costs. Salaries and other general and administrative expenses are impacted by inflationary trends ~~Market~~and ~~Information~~the supply and demand of qualified professionals and professional services. Inflation and price fluctuations affect the costs associated with exploring for and producing natural gas and oil, which have a material impact on our financial performance.

~~Our~~Item ~~common~~8: ~~stock~~Financial isStatements ~~listed~~and onSupplementary ~~the NASDAQ Global Market ("NASDAQ") under the symbol "WRES".~~ Data

~~The following~~See ~~table~~Report ~~sets~~of ~~forth,~~Independent ~~for~~Registered ~~the~~Public Accounting ~~period~~Firm ~~indicated, the high~~ and ~~low~~Audited ~~sales~~Financial ~~prices~~Statements ~~for~~at ~~our~~Item 15. ~~common stock as reported by NASDAQ:~~

	Common Stock Price
	High		Low
Year Ended December 31, 2015
First Quarter	$	1.67	$	0.84
Second Quarter		1.27		0.68
Third Quarter		0.70		0.35
Fourth Quarter		0.65		0.14
Year Ended December 31, 2014
First Quarter	$	5.27	$	3.04
Second Quarter		6.24		4.31
Third Quarter		7.02		5.19
Fourth Quarter		5.38		1.20

Item 9:

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~On March 11, 2016, the closing sales price for our common stock as reported by NASDAQ was $~~None.24 ~~per share.~~

~~Holders~~ Item 9A: Controls and Procedures

AsDisclosure ofControls ~~March 11,~~and ~~2016 there were approximately 1,800 record holders of our common stock~~Procedures.

We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Evaluations have been performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such terms are defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon those evaluations, management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were adequate and effective as of December 31, 2016 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange ~~Dividend~~Act ~~Policy~~ are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

WeOur ~~have~~management does ~~never~~not ~~paid~~expect orthat ~~declared~~our ~~any~~disclosure ~~cash~~controls ~~dividends~~and onprocedures ~~our~~will ~~common~~prevent ~~stock~~all errors and all fraud. ~~Dividends~~The design of a control system must reflect the fact that there are ~~also~~resource ~~restricted~~constraints, ~~under~~and the ~~terms~~benefits of ~~our~~controls ~~Credit~~must be considered relative to ~~Facilities~~their costs. Based on the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the ~~indenture~~Company ~~governing~~have ~~our~~been ~~Senior~~detected. ~~Notes~~These inherent limitations include the realties that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. WeAdditionally, ~~currently~~controls ~~intend~~can tobe ~~retain~~circumvented ~~earnings~~by the individual acts of some persons, ifby collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events. Therefore, toa ~~service~~control ~~our~~system, ~~debt~~no ~~obligations~~matter how well conceived and ~~finance~~operated, can provide only reasonable, not absolute, assurance that the ~~growth~~objectives of the control system are met. Our disclosure controls and ~~development~~procedures are designed to provide such reasonable assurances of achieving our ~~business~~desired control objectives and wethe Chief doExecutive ~~not~~Officer ~~expect~~and tothe ~~pay~~Chief ~~any~~Financial ~~cash~~Officer, ~~dividends~~as onof December 31, 2016, have concluded that our ~~common~~disclosure ~~stock~~controls and procedures are effective in ~~the~~achieving ~~foreseeable~~that ~~future~~level of reasonable assurance.

Management’s Report ~~Stockholder~~on ~~Return~~Internal ~~Performance~~Control ~~Presentation~~ over Financial Reporting

~~The~~Our ~~following~~management ~~common~~is ~~stock~~responsible ~~performance~~for ~~graph~~establishing ~~shows~~and ~~the~~maintaining ~~performance~~adequate ofinternal ~~Warren~~control ~~Resources~~over ~~common~~financial ~~stock~~reporting. ~~through~~As ~~December~~defined in Exchange Act Rule 3113a-15(f), ~~2015. As~~internal ~~required~~control over financial reporting is a process designed by, ~~applicable~~or ~~rules~~under the supervision of, ~~the~~our ~~SEC~~Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management ~~the~~and ~~performance~~other ~~graph~~personnel, ~~shown~~to ~~below~~provide ~~was~~reasonable ~~prepared~~assurance ~~based~~regarding onthe reliability of financial reporting and the ~~following~~preparation ~~assumptions~~of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

~~The indices~~• inpertain ~~the performance graph compares the performance of the Company's common stock~~ to the ~~S&P 500~~maintenance ~~Index, and to the Dow Jones U.S. Oil & Gas Index for each year since December 31, 2010, which is a composite index consisting~~ of 92records ~~U.S. oil and gas companies~~ that ~~includes~~in ~~integrated~~reasonable ~~major~~detail ~~oil~~accurately and ~~gas~~fairly ~~companies~~reflect asthe ~~well~~transactions ~~as smaller independent U.S. companies,~~ and adispositions ~~peer~~of ~~group~~our ~~index~~ assets;

65• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

~~Table~~• provide reasonable assurance regarding prevention or timely detection of ~~Contents~~unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

~~comprised of~~39 7 United States companies engaged in oil and natural gas operations whose stocks were traded on NASDAQ or the NYSE during the period from December 31, 2010 through December 31, 2015. The companies that comprise the peer group are Abraxas Petroleum Corporation, Callon Petroleum Corp., Gastar Exploration, Goodrich Petroleum Corporation, Panhandle Royalty Company, PetroQuest Energy, Inc., and Resolute Energy Corporation, which companies have market capitalizations similar to Warren and are primarily involved in domestic U.S. exploration and production.

Table of Fiscal Year Ended December 31 (in US Dollars) Contents


Warren Resources, Inc.	100	133.06	114.69	128.16	65.71	8.57
S&P 500 Index	100	112.78	127.90	165.76	184.64	183.3
Dow Jones US Oil & Gas Index	100	120.19	123.33	122.86	135.11	102.3
Peer Group	100	117.15	97.48	141.76	89.96	30.23

Index to Financial Statements

~~Data provided~~Under bythe ~~S&P's~~supervision ~~Institutional~~and ~~Market~~with ~~Services~~the participation of our management, including our Chief Executive Officer and ~~Dow~~Chief ~~Jones &~~Financial ~~Company~~Officer, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of December ~~Inc~~31, 2016 based on the criteria in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2016.

The ~~information~~ inannual ~~this~~report on Form 10-K ~~appearing~~does ~~under~~not include an attestation report of the ~~heading~~Company’s independent ~~"Stockholder~~registered ~~Return~~public ~~Performance~~accounting ~~Presentation"~~firm isregarding ~~being~~internal ~~"furnished"~~control ~~pursuant~~over tofinancial ~~Item 2~~reporting.01 ~~(e) of Regulation S~~As a smaller reporting company as defined in Rule 12b-K2 ~~under~~of the ~~Securities~~Exchange Act, ~~and~~our ~~shall~~management’s report was not besubject ~~deemed~~ to beattestation ~~"soliciting~~by ~~material"~~our orregistered ~~"filed"~~public ~~with~~accounting ~~the~~firm ~~SEC~~pursuant ~~or subject~~ to ~~Regulation 14A~~rules orof ~~14C,~~the ~~other~~Securities ~~than~~and asExchange ~~provided~~Commission ~~in Item 2.01~~that ~~(e) of~~permit ~~Regulation S-K,~~us or to ~~the~~provide ~~liabilities~~only ofmanagement’s ~~Section 18~~report ofin ~~the~~this ~~Exchange~~annual ~~Act~~report on Form 10-K.

~~Recent~~Changes ~~Sales~~in ofInternal ~~Unregistered~~Control ~~Securities~~over Financial Reporting.

OnThere ~~October 22,~~were ~~2015,~~no changes in ~~connection~~internal ~~with~~control ~~the~~over ~~exchange~~financial byreporting ~~certain~~that ~~holders~~occurred ofduring the ~~Senior~~most ~~Notes~~recent ~~for~~fiscal ~~Converted~~quarter ~~Loans~~that ~~and~~have ~~common stock~~materially asaffected, ~~described~~or ~~under~~are ~~Note C~~reasonably oflikely ~~the Notes~~ to ~~Consolidated~~materially ~~Financial Statements~~affect, ~~the~~our ~~Company~~internal ~~issued~~control ~~4,000,000~~over ~~shares~~financial ~~of common stock~~reporting. ~~Such issuance was made in reliance upon an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof.~~

66Item 9B: Other Information.

~~Table~~Not ofapplicable. ~~Contents~~

~~Securities~~PART ~~Authorized~~III ~~for Issuance Under Compensation Plans~~

~~The~~Item ~~table~~10: ~~below includes information about our equity compensation plans as of December 31~~Directors, ~~2015,~~Executive ~~each~~Officers ofand ~~which~~Corporate ~~has been approved by our stockholders:~~ Governance

		Number of Shares Authorized for Issuance under plan			Number of securities to be issued upon exercise of outstanding options and restricted stock			Weighted-average exercise price of outstanding options and restricted stock			Number of securities remaining available for future issuance under equity compensation plans
2010 Stock Incentive Plan			9,950,000			4,871,057		$	1.85			2,828,050

Information required by this item will be provided in an amendment of Form-10K/A and is hereby incorporated by reference herein.

The ~~Item 6: Selected~~Company’s Code of Business Conduct and Ethics and the Code of Ethics for the Chief Executive Officer, Chief Financial ~~Data~~ Officer and Chief Accounting Officer can be found on the Company’s internet website located at www.warrenresources.com. If the Company amends the Code of Ethics or grants a waiver, including an implicit waiver, from the Code of Ethics, the Company intends to disclose the information on its internet website. This information will remain on the website for at least 12 months.

WeItem ~~are~~11: aExecutive ~~smaller reporting company as defined in Rule 12b-2 of the Exchange Act; therefore, pursuant to Regulation S-K, we are not required to make disclosures under this Item.~~ Compensation

Information ~~Item 7: Management's~~required ~~Discussion~~by ~~and~~this ~~Analysis~~item ofwill ~~Financial~~be ~~Condition~~provided in an amendment on Form 10-K/A and ~~Results~~is ofhereby ~~Operations~~ incorporated by reference herein.

~~The~~Item ~~discussion~~12: ~~and~~Securities ~~analysis~~Ownership that follows should be read together with the "Selected Consolidated Financial Data" and the accompanying financial statements and notes related thereto that are included elsewhere in this annual report on Form 10-K. It includes forward-looking statements that may reflect our estimates, beliefs, plans and expected performance. The forward-looking statements are based upon events, risks and uncertainties that may be outside our control. Our actual results could differ significantly from those discussed in these forward- looking statements. Factors that could cause or contribute to these differences include but are not limited to, market prices for natural gas and oil, regulatory changes, estimates of ~~proved~~Certain ~~reserves,~~Beneficial ~~economic~~Owners ~~conditions, competitive conditions, development success rates, capital expenditures~~ and ~~other~~Management ~~uncertainties, as well as those factors discussed below~~ and ~~elsewhere~~Related inStockholder this annual report on Form 10-K, including in "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements", all of which are difficult to predict. As a result of these assumptions, risks and uncertainties, the forward-looking matters discussed may not occur.Matters

Information required by this item will be provided in an amendment on Form 10-K/A and is incorporated ~~Overview~~ herein by reference.

WeItem ~~are~~13: anCertain ~~independent~~Relationships ~~energy company engaged in the exploration~~ and ~~development~~Related of domestic onshore oil and natural gas reserves. We focus our efforts primarily on the development of our waterflood oil recovery properties in the Wilmington field within the Los Angeles Basin of CaliforniaTransactions, ~~the Marcellus Shale in northeastern Pennsylvania~~ and ~~our~~Director ~~coalbed methane, or CBM, natural gas properties located in the Rocky Mountain region.~~ Independence

AsInformation ofrequired ~~December 31,~~by ~~2015,~~this weitem ~~owned~~will ~~natural~~be ~~gas~~provided ~~and oil leasehold interests~~ in ~~approximately~~an ~~106,335~~amendment ~~gross~~on ~~(80,546~~Form ~~net)~~10-K/A ~~acres,~~and ~~approximately 66% of which were undeveloped. Substantially all our undeveloped acreage~~ is ~~located~~hereby inincorporated ~~the~~by ~~Rocky~~reference ~~Mountains~~herein. ~~Our total estimated net proved reserves are located on approximately 34% of our net acreage.~~

~~Liquidity~~Item ~~and~~14: ~~Capital~~Principal ~~Resources~~ Accountant Fees and Services

~~Our~~Information ~~cash~~required ~~and~~by ~~cash~~this ~~equivalents~~item ~~increased~~will ~~approximately~~be provided ~~$25.1 million~~ in ~~2015~~an toamendment ~~$26.8 million~~on asForm of10-K/A ~~December 31, 2015. This resulted from cash provided by operating activities of $3.6 million~~ and ~~cash~~is ~~provided~~hereby byincorporated ~~financing activities of $57.8 million which was offset~~ by ~~cash~~reference ~~used in investing activities of $36~~herein.~~3 million.~~

~~Cash provided~~40 by operating activities consisted primarily of cash received for the sale of oil and gas, collections of accounts receivable, partially offset by payments of accounts payable. Cash used in investing activities was primarily spent on capital expenditures for the development of oil and gas

67Table of Contents

TableIndex ofto ContentsFinancial Statements

~~properties. Cash~~PART ~~provided~~IV ~~by financing activities primarily represents the funds received from our First and Second Lien Credit Facilities, which are described further below.~~

~~Capital additions~~Item ~~for~~15: ~~the twelve months ended December 31~~Exhibits, ~~2015~~Financial ~~were~~Statement approximately $19.3 million and consisted of $13.3 million in drilling and development costs in the Marcellus Assets, $4.4 million for facilities in our California properties and $1.6 million for carry over development in our Wyoming properties. Schedules

On May 22, 2015, Warren Resources entered into a first lien credit agreement by and among the Company, Wilmington Trust, National Association, as Administrative Agent, and the lenders from time to time party thereto, that provides for a five-year, $250 million term loan facility (the "First Lien Credit Facility") which matures on May 22, 2020. The First Lien Credit Facility is guaranteed by Warren Resources of California, Inc., Warren E&P, Inc. and Warren Marcellus LLC, which are three of the Company's wholly-owned subsidiaries and is collateralized by substantially all of Warren's assets, including the equity interests of the guarantors. After giving effect to certain amendments to the First Lien Credit Facility that were adopted on October 22, 2015, the First Lien Credit Facility includes an escalation of certain covenants, including requirements that (a) ~~during the period commencing on June 30, 2016 until April 30, 2017, the consolidated first lien leverage ratio~~ (~~as defined in the First Lien Credit Facility) for any period of four consecutive fiscal quarters shall not be greater than 5.5 to~~ 1~~.0, determined as of the last day of each fiscal quarter, and (b~~) ~~during~~ ~~the~~Financial ~~period~~Statements following April 30, 2017 until the maturity date of the facility, the consolidated first lien leverage ratio for any period of four consecutive fiscal quarters shall not be greater than 5.0 to 1.0 as of the last day of each fiscal quarter. Additionally, the amendment allows for a draw down of an additional $15 million in new first lien loans at the lender's sole discretion, authorizes the Second Lien Credit Facility transition described below and makes certain additional changes to conform and respond to provisions of the new Second Lien Credit Facility (as defined below), including provisions providing that (i) any future draws by the Company of the remaining availability under the first lien facility will be at the discretion of the first lien lenders, and (ii) the first lien lenders will retain discretion over the Company's ability to conduct asset sales with proceeds in excess of $1 million.

In addition, certain of the lenders exchanged approximately $69.6 million of the Company's previously issued 9.000% Senior Notes due 2022 (the "Senior Notes") at a discount for approximately $47.2 million of the first lien term loans. This transaction was accounted for in accordance with ASC 470 and ASC 405 and as a result recognized as a gain in the retirement of debt in the amount of $14.4 million during 2015.


	Form 10-K Pages
Report of Independent Registered Public Accounting Firms		F- 2
Consolidated Balance Sheets		F- 4
Consolidated Statements of Operations		F- 5
Consolidated Statements of Cash Flows		F- 6
Consolidated Statements of Comprehensive Loss		F- 7
Consolidated Statements of Stockholders’ Equity (Deficit)		F- 8
Notes to Consolidated Financial Statements		F- 9

~~The annual interest rate on borrowings under the First Lien Credit Facility is 8.5% plus LIBOR for the applicable LIBOR period~~ (~~with~~ a ~~minimum LIBOR rate of 1%~~)(2) ~~and~~All isother ~~payable~~schedules ~~quarterly in~~have ~~arrears~~been onomitted ~~the~~because ~~next to last business day of each March, June, September and December. At present,~~ the ~~interest~~required ~~rate~~information is ~~9.5%.~~inapplicable Asor ofis ~~December 31,~~shown ~~2015~~ in the ~~Company~~Notes ~~had~~to ~~$234.7 million outstanding on its borrowings under~~ the ~~First~~Consolidated ~~Lien~~Financial ~~Credit Facility and approximately $186 thousand in accrued and unpaid interest~~Statements.

~~On October 22, 2015, the Company entered into~~ (a ~~second lien credit facility~~ )(~~the "Second Lien Credit Facility"~~3) byExhibits ~~and~~required ~~among the Company, Cortland Capital Market Services, LLC, as Administrative Agent, and the lenders from time~~ to ~~time~~be ~~party~~filed ~~thereto.~~by ~~The Second Lien Credit Facility provides for a five-year, approximately $51.0~~Item ~~million~~601 ~~term loan facility that matures on November 1, 2020. At closing, certain~~ of ~~the lenders exchanged approximately $63.1~~Regulation ~~million in face value of previously~~S-~~issued Senior Notes held by them, plus accrued interest, for (i) approximately $40~~K.~~1 million~~ of second lien term loans under the Second Lien Facility, and (ii) four million (4,000,000) shares of Company Common Stock and, in addition, extended credit in the form of new second lien term loans in the amount of approximately $11.0 million.

68The exhibits required to be filed pursuant to the requirements of Item 601 of Regulation S-K are set forth in the Exhibit Index accompanying this Annual Report on Form 10-K and are incorporated herein by reference.

~~Table~~Item of16: ~~Contents~~Form 10-K Summary

~~The Second Lien Credit Facility is subject to prepayment out of the proceeds of asset sales, subject to limited reinvestment rights and certain excluded asset sales~~None. The Second Lien Credit Facility is guaranteed by Warren Resources of California, Inc., Warren E&P, Inc. and Warren Marcellus LLC on substantially similar terms as the guarantees related to the First Lien Credit Facility and is collateralized by second-priority liens on substantially all of Warren's assets, including the equity interests of the guarantors, to the extent such assets or interests secure the First Lien Credit Facility.

~~The annual~~41 interest rate on borrowings under the Second Lien Facility is 12%, with interest payable semi-annually in arrears on each April 20 and October 20. On the first three semi-annual interest payment dates, beginning with April 20, 2016, the Company may elect to pay up to all of such interest (6% per semi-annual period) by capitalizing accrued and unpaid interest and adding the same to the principal amount of the second lien loans then outstanding. For the subsequent three semi-annual interest payment dates, beginning with October 20, 2017 and ending October 20, 2018, the Company may elect to pay up to one quarter of such interest (1.5% per semi-annual period) by capitalizing accrued and unpaid interest and adding the same to the principal amount of the Second Lien Loans then outstanding. As of December 31, 2015, the Company had approximately $52.2 million outstanding borrowings under the Second Lien Credit Facility which consists of $51 million in original borrowing and $1.2 million in accrued unpaid interest. The Company has accounted for this transaction as a troubled debt restructuring in accordance with authoritative guidance, whereby no gain was recognized on the retirement of debt, and a premium on the face value of the debt will be amortized over the life of the instrument. The carrying value of the premium on Second Lien Credit Facility as of December 31, 2015 was $22.7 million.

As partTable of our plan to manage liquidity risks and in recognition of lower oil prices, we have scaled back our capital expenditure budget and continue to explore opportunities to divest non-core assets. Contents

Our independentIndex registered public accounting firm has included in its audit opinion for the year ended December 31, 2015 a statement that there is substantial doubt as to our abilityFinancial to continue as a going concern. Although we are not subject to borrowing base redeterminations on the First and Second Lien Credit Facilities, we are subject to a variety of restrictions under these new facilities. Warren continues to aggressively review opportunities for further strategic refinancing that will reduce the outstanding principal amount of our debt, provide us with additional liquidity and give us an opportunity to reduce our cash interest expense going forward. In addition, due to the sustained level of lower prevailing oil and natural gas 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 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 Senior Notes the right declare the entire principal amount of the Senior 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. Thus far, no such acceleration of Warren's debt obligations has occurred. Nevertheless, these debt instruments are now reclassified from long-term liabilities to current liabilities. Statements

~~Although Warren~~INDEX isTO ~~continuing~~FINANCIAL toSTATEMENTS 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.

During 2015, the Company reported a net loss of $620.0 million (which included $578.3 million of impairment expense and $20.1 million of gains on derivative financial instruments). This compares to


	Page
Report of Independent Registered Public Accounting Firms		F-2
Consolidated Balance		F-4
Consolidated Statements of Operations		F-5
Consolidated Statements of Cash Flows		F-6
Consolidated Statements of Comprehensive Income Loss		F-7
Consolidated Statement of Stockholders’ Equity (Deficit)		F-8
Notes to Consolidated Financial Statements		F-9

69F-1

2014 whenIndex theto CompanyFinancial had net income of $24.0 million (which included $7.4 million of gains on derivative financial instruments). Statements

~~As of~~REPORT ~~December 31,~~OF ~~2015,~~INDEPENDENT weREGISTERED ~~had~~PUBLIC ~~approximately~~ACCOUNTING ~~3.6 million~~FIRM outstanding stock options issued under our stock based equity compensation plans. Of the total outstanding vested options, none had exercise prices below the closing market price of $0.21 of our common stock on December 31, 2015.

~~The Company's~~Board ~~proved reserves decreased as~~ of ~~December 31,~~Directors 2015 compared to prior years. The 2015 decrease was primarily the result of the sustained low commodity price environment. Our oil operations include a secondary recovery waterflood with significant fixed costs. During 2015, our oil lease operating expenses were $21.83 per barrel of oil produced. Our natural gas operations include reinjecting the produced water into deep formations and ~~compressing~~Stockholders and transporting the gas with significant fixed costs. During 2015, our natural gas lease operating expenses were $1.00 per Mcf of gas produced. The Company's estimated proved reserves are based on assumptions that may prove to be inaccurate. The Company's estimated proved reserves for the periods indicated are listed below.

	Years Ended December 31,
	2015		2014
Estimated Proved Oil and Natural Gas Reserves:
Net oil reserves (MBbls)		12,939		16,794
Net natural gas reserves (MMcf)		163,731		327,328

Total Net Proved Oil and Natural Gas Reserves (MBoe)		40,227		71,348



Estimated Present Value of Net Proved Reserves (in thousands):
PV-10 Value
Proved developed	$	85,147	$	460,059
Proved undeveloped		10,876		149,067

Total		96,023		609,126
Less: future income taxes, discounted at 10%		—		54,059

Standardized measure of discounted future net cash flows	$	96,023	$	555,067



Prices Used in Calculating Reserves:
Oil (per Bbl)	$	42.81	$	86.71
Natural Gas (per Mcf)	$	1.74	$	3.22
Proved Developed Reserves (MBoe)		32,339		42,439

Warren Resources, Inc.

We have audited the accompanying consolidated balance sheet of Warren Resources, Inc. and its subsidiaries (collectively, the “Company”) as of ~~2015~~December 31, 2016 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for three month period ended December 31, 2016 ~~Capital~~and ~~Expenditure~~the ~~Program~~ nine month period ended September 30, 2016. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audit.

~~During~~We ~~2015,~~conducted weour ~~invested~~audit ~~$19.3 million~~ in ~~our~~accordance ~~capital~~with ~~expenditure~~the ~~program~~standards of the Public Company Accounting Oversight Board (United States). ~~The~~Those ~~majority~~standards ofrequire ~~our~~that ~~2015~~we ~~investment~~plan and ~~was~~perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company~~'s contractually~~ ~~obligated~~is ~~commitment~~not required to ~~drill~~have, ~~two~~nor ~~Upper~~were ~~Marcellus~~we

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