Warren Resources To Purchase Marcellus Assets Of Citrus Energy - Quick Facts

(RTTNews) - Warren Resources, Inc. (WRES) Monday said it will buy all of the Marcellus assets of Citrus Energy Corp. and two additional working interest owners for $352.5 million, with an aim to strengthen its new basin platform in the prolific Marcellus Shale and for adding a new core area to Warren's existing California oil and Wyoming natural gas assets. As part of this transaction, Warren will issue $40 million common shares priced at $6.00 per share, with the remainder to be funded through fully committed debt financing. The assets are currently producing about 82 million net cubic feet per day of natural gas, as of June 2014. Upon closing of the purchase and sale agreement, Warren will hedge a significant portion of the acquired natural gas production. The company has escrowed a 3 percent cash deposit to Citrus under the terms of the agreement. Acquired assets will be 100 percent operated by Warren after the acquisition, which is expected to be highly accretive to the firm's earnings. After the acquisition, Lance Peterson, president and Co-Founder of Citrus, will be joining Warren on its Board of Directors. Also, Citrus' key technical, operating and land personnel will join Warren as employees,including Zachary Waite, who will assume the role of Vice President of Business Development and Marcellus Operations, and Daniel Collins, who will be the Vice President of Marcellus Land. With this acquisition, the Warren expects pro forma net production to rise by more than 200 percent from about 36 million cubic feet equivalent per day to about 118 million cubic feet equivalent per day. The transaction is likely to close on July 1.