NEW YORK, Sept. 8, 2008 (GLOBE NEWSWIRE) -- Warren Resources, Inc. (Nasdaq:WRES) announced today that its Board of Directors has adopted a shareholder rights plan ("Rights Plan") designed to assist all Warren shareholders in receiving fair and equal treatment in the event of an unsolicited takeover proposal. The Rights Plan is intended to safeguard against abusive takeover tactics that limit the ability of shareholders to realize the long-term value of their investment in Warren. The plan is not intended to, and will not, prevent a takeover, but it is expected to encourage persons seeking to acquire Warren to negotiate with the Board prior to attempting a takeover.
To implement the Rights Plan, the Board of Directors declared a dividend distribution of one preferred share purchase right (a "Right") on each outstanding share of common stock, held of record on September 9, 2008. The Rights will automatically trade with the underlying common stock and will not be exercisable.
The Rights will be exercisable upon the earlier to occur of either of the following:
(a) ten business days after the public announcement that a person has
acquired "Combined Ownership" of 20% or more of the Company's
outstanding shares of common stock. "Combined Ownership" is
defined as the sum of a person's beneficial ownership and the
person's derivative equity interest (including economic
non-voting interests) in common shares of Warren, or
(b) ten business days (or such later date as may be determined by
action of the Board of Directors prior to a person having
Combined Ownership aggregating 20% or more of the outstanding
shares of common stock) following the commencement of a tender or
exchange offer by a person intended to result in such person
having a Combined Ownership aggregating 20% or more of the
outstanding shares of common stock.
If either of these events occurs, each Right would entitle holders to purchase one one-thousandth of a share of Warren's newly created Series B Junior Participating Preferred Stock at an exercise price of $45 per share. Alternatively, in lieu of being exercised for Preferred Stock, each Right would entitle the holder, to buy from the Company, for a total of $45, shares of the Company's common stock having an aggregate market value of $90. Also following the acquisition by a person having Combined Ownership of 20% or more of the outstanding shares of the Company's common stock and prior to an acquisition of 50% or more of the outstanding shares of common stock, the Board of Directors may issue one share of the Company's common stock in exchange for each outstanding Right (other than Rights owned by such person).
If the Company is acquired in a merger or other business combination transaction, or 50% or more of its assets or earning power is sold after the occurrence of one of these triggering events, each Right (other than Rights owned by the Acquiring Person) would be entitled to receive, upon payment of the $45 exercise price, common shares of the acquiring company having an aggregate market value of $90.
Prior to the acquisition by a person having Combined Ownership of 20% or more of the outstanding shares of the Company's common stock, the Rights are redeemable for $.01 per Right at the option of the Board of Directors subject to certain limitations. Unless the Rights are redeemed or exchanged earlier, they will expire on August 31, 2011. The Rights do not apply to transactions or investments approved by the Board of Directors.
At least once annually during the term of the Rights Plan, a Shareholder Rights Plan Committee comprised of independent directors of the Company will review the Rights Plan to determine whether the Rights Plan remains in the interests of the Company and its stockholders. Following each such review, the Shareholder Rights Plan Committee will report its conclusions to the full Board of Directors of the Company, including any recommendation in light thereof as to whether the Rights Plan should be modified or the Rights should be redeemed.
Norman F. Swanton, Chairman and CEO of Warren, stated, "This plan will encourage anyone attempting to acquire Warren Resources to first negotiate with the board of directors, and thereby assist our shareholders in receiving fair treatment. A number of our peer companies have adopted similar plans over the past few years." Swanton added, "Our plan is designed to allow sufficient time to maximize shareholder value in the event of an unsolicited bid for the shares of the corporation."
A summary of the Rights Plan will be included in a Form 8-K to be filed by Warren with the SEC and will also be mailed to shareholders of record of Warren's common stock shortly after the September 9, 2008 record date.
About Warren Resources
Warren Resources, Inc. is a growth-oriented independent energy company engaged in the exploration and production of domestic oil and natural gas reserves. Warren's activities are primarily focused on producing oil in the Wilmington field in California and coalbed methane natural gas in the Eastern Washakie Basin in Wyoming. The Company is headquartered in New York, New York, and its exploration and production subsidiary, Warren E&P, Inc., has offices in Casper, Wyoming and Long Beach, California.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Warren believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. See "Risk Factors" in the Company's Annual Report on Form 10-K and other public filings with the Securities and Exchange Commission (www.sec.gov).