James A. Watt was named Warren Resources’ chief restructuring officer by the company’s board of directors, in light of the possible necessity of a bankruptcy proceeding. Watt is the company’s president and CEO.

Warren Resources continues to engage in discussions with its first lien lender, second lien lender and an ad hoc group of unsecured noteholders, regarding a restructuring of its debt obligations, which may occur as an out-of-court restructuring or pursuant to a bankruptcy court proceeding.

In either event, Warren has focused its discussions on its preference for a consensual restructuring with these stakeholders. The lender under Warren’s first lien credit facility has made a proposal for a viable post-restructuring capital structure that would be acceptable to Warren because it would result in deleveraging the company by converting a substantial amount of its debt to equity.

Warren has presented this proposal to the lender under its second lien credit facility and to the holders of more than 95% in principal amount of its unsecured notes. However, an agreement among all three categories of creditors has not been reached. Consequently, Warren is evaluating strategies to expedite achievement of a comprehensive restructuring of its capital structure, including the possibility and features of a voluntary bankruptcy proceeding.

Dominick D’Alleva, chairman of Warren’s board of directors, commented, “We are hopeful that Mr. Watt will be able to bring all parties together to complete an out-of-court restructuring or a prepackaged or pre-negotiated bankruptcy filing, but if our creditors fail to reach a timely agreement, we look to Jim’s leadership and extensive restructuring background to guide us through a bankruptcy proceeding on terms that are acceptable to our first lien lender and that preserve and maximize value available for our stakeholders.”

As of March 31, 2016, Warren’s first lien creditors held debt of approximately $235 million in principal amount, second lien creditors held debt of approximately $52 million in principal amount and investors held approximately $167 million principal amount of Warren’s unsecured senior notes.