As filed with the Securities and Exchange Commission on December 2, 2004

---

---

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

(Exact name of Registrant as specified in its charter)

---

     

PROSPECTUS SUMMARY

      This summary highlights information contained elsewhere in this prospectus. You should carefully read the entire prospectus before investing in our common stock. Unless the context otherwise requires, all references to “Warren”, “we”, “us” and “our” refer to Warren Resources, Inc. and its subsidiaries. The term “you” refers to a prospective investor. References to our oil and gas interests include our allocable share of oil and gas leasehold interests held by drilling programs that we sponsor together with minority interests allocable to other interest holders in 13 limited liability companies that we control. We have included definitions of technical terms and abbreviations important to an understanding of our business under “Glossary of Certain Oil and Natural Gas Terms” beginning on page A-1.

Overview

      We are a growing independent energy company engaged in the exploration and development of domestic onshore natural gas and oil reserves. We focus our efforts primarily on the exploration and development of coalbed methane, or CBM, properties located in the Rocky Mountain region and on our waterflood oil recovery program in the Wilmington Townlot Unit, or Wilmington unit, in the Wilmington field within the Los Angeles Basin of California. Our CBM operations are located in two core areas: the Washakie Basin, which comprises approximately the southeast one-third of the Greater Green River Basin in southwestern Wyoming, and the Powder River Basin in northeastern Wyoming. As of September 30, 2004, we owned natural gas and oil leasehold interests in approximately 267,954 gross (148,568 net) acres, 95% of which are undeveloped. Substantially all our undeveloped acreage is located in the Rocky Mountains. We have identified approximately 1,164 drilling locations on our acreage, primarily on 80-acre and 160-acre well spacing.

      In the Washakie Basin, we have assembled a large, predominantly undeveloped CBM leasehold, which we believe positions us for significant long-term growth. Our operations in the Washakie Basin consist of the Atlantic Rim project located along the Basin’s eastern rim and the Pacific Rim project located along its western rim. As of September 30, 2004, we had 253,524 gross (142,801 net) acres prospective for CBM development in this area, of which 138,175 are net undeveloped acres. This acreage contains approximately 1,049 identified CBM drilling locations. We own a 56% average working interest in this acreage.

      Our Atlantic Rim project consists of approximately 217,845 gross (114,796 net) acres. As of September 30, 2004, we had participated in the drilling of 65 CBM wells in this project. These wells included 22 producing wells and 43 wells that are awaiting completion of production facilities, all of which we believe are capable of commercial production. Based on geological and seismic data, we previously drilled 26 geological test wells, 11 of which we believe are capable of commercial production. As of June 30, 2004, the estimated proved reserves for the 22 producing wells and for their 23 proved undeveloped offset locations average 1.04 Bcfe per gross well on 80-acre and 160-acre spacing, based upon a reserve report prepared by Williamson Petroleum Consultants, Inc., an independent petroleum engineering firm. In 2004, we entered into an agreement to jointly construct, own and operate compression facilities and a pipeline in the Atlantic Rim with Anadarko Petroleum Corporation. During 2005, we plan to increase our drilling activity in the Atlantic Rim by participating in the drilling of 52 gross (14.5 net) additional wells in this area.

      During the last half of 2003, we established our Pacific Rim project, which consists of approximately 35,679 gross (28,005 net) acres prospective for CBM development. As of September 30, 2004, we had drilled 12 CBM wells and acquired four previously drilled wells in this project, all on 160-acre spacing. Nine of these wells commenced pumping in June 2004 and we expect the remaining wells to be pumping by the end of 2004. During 2005, we also plan to increase our drilling activity in the Pacific Rim by participating in the drilling of 38 gross (19.7 net) additional wells in this area.

      As of June 30, 2004, we had estimated net proved reserves of 99.5 Bcfe, with a PV-10 value of $186.4 million, based on the reserve report prepared by Williamson Petroleum Consultants. These estimated net proved reserves are located on approximately 5% of our net acreage. Based on our preliminary results to date, we believe that a substantial amount of our remaining undeveloped CBM acreage in the Washakie Basin has commercial potential.

      We currently have interests in 202 gross (80.0 net) producing wells and are the operator of record for 54% of these wells. Through our joint venture agreements, we actively participate in operating activities for most of the wells for which we are not operator of record. At September 30, 2004, our total daily production was 18.7 MMcfe/d gross (5.6 MMcfe/d net). For 2005, we have a total capital expenditure budget of approximately $46.5 million to participate in the drilling of 131 gross (68.8 net) wells.

      The following table provides information regarding our operations by area:

			As of June 30, 2004								As of September 30, 2004
			Estimated Net								Identified				Net				Net
			Proved Reserves				PV-10				Drilling				Producing				Undeveloped
Area			(Bcfe)(1)				(in millions)(1)				Locations(2)				Wells				Acreage
Washakie				9.7			$	16.3				1,049				4.2				138,175
Powder River				3.4				8.8				12				58.1				453
Wilmington				84.3				156.9				100				14.6				908
Other(3)				2.1				4.4				3				3.1				1,291
	Total			99.5			$	186.4				1,164				80.0				140,827

---

(1)	The estimates of our reserves and the present value of future net revenues were determined using $5.09 per Mcf of natural gas and $32.49 per barrel of oil, which are the average realized prices used in our reserve report as of June 30, 2004. The report was prepared by Williamson Petroleum Consultants. See “Business — Natural Gas and Oil Reserves”.
(2)	Identified drilling locations consist of total gross locations that we have identified and currently are estimating for our future drilling activities on existing acreage. The total locations shown in the table include 128 proved undeveloped locations. Actual drilling activities may differ from this estimate. See “Risk Factors — Risks Relating to Our Business” and “— Risks Relating to the Oil and Gas Industry”.
(3)	Includes conventional oil and gas operations primarily in New Mexico, Texas and North Dakota.

Our History

      From our inception in 1990 through 2003, we functioned principally as the sponsor of privately placed drilling programs and joint ventures. During that period, we sponsored 31 drilling programs that raised an aggregate of approximately $228 million. Under these programs, we contribute drilling locations, pay tangible drilling costs and provide turnkey drilling services to the drilling programs and retain an interest in the wells drilled. On behalf of the drilling programs, we have participated in the drilling of approximately 500 conventional, horizontal and CBM wells, of which approximately 90% were completed as commercial producing wells. At September 30, 2004, we had deferred income from turnkey drilling contracts of approximately $15 million related to the drilling programs, which was paid in advance in return for our obligation to drill the corresponding wells on behalf of our drilling programs. The drilling programs will participate with us on a pro rata basis in all our drilling activities outside of the Wilmington unit until the turnkey contracts have been completed, which we expect to occur by the third quarter of 2005.

      Since 1999, we have been assembling large acreage positions, primarily in the Rocky Mountains. We intend to invest more of our own capital in future wells to accelerate our growth in production and reserves. We anticipate that future drilling activities with third parties will consist of joint ventures and similar arrangements.

Anadarko Joint Venture

      In December 2002, we entered into a joint venture with Anadarko Petroleum Corporation, one of the largest independent oil and gas exploration and production companies in the world. This joint venture provides for exploration and development within the Atlantic Rim project on a 50/50 basis covering over 141,000 net acres within a 211,000 acre area of mutual interest, or AMI. Under the joint venture, we contributed 89,156 net acres, and Anadarko contributed 51,844 net acres and paid us $20.2 million, which

Business Strategy

      The principal elements of our business strategy are designed to generate growth in oil and gas reserves, production volumes and cash flows at a positive return on invested capital. We plan to focus on the following:

	•	Exploit Existing Properties Through the Drillbit. We intend to increase our proved reserves by drilling numerous locations identified on our Rocky Mountain CBM properties and on our Wilmington unit. As of September 30, 2004, we have identified a total of 1,164 drilling locations, of which we plan to participate in the drilling of 131 gross wells during 2005.
	•	Increase Our Working Interest in Future Wells. We plan to increase our level of participation in future wells by investing more of our own capital in drilling operations in our high growth areas. We believe this will enable us to accelerate our growth in production, reserves and cash flows.
	•	Pursue Selective Acquisitions and Joint Ventures. We believe we are well positioned, given our asset base and technical expertise, to pursue selected acquisitions and attract industry joint venture partners. We expect to pursue further acquisitions of natural gas and oil properties in areas where we have specific technical knowledge and experience. We also plan to enter into additional joint ventures to increase our CBM acreage and develop our reserves.
	•	Reduce Costs Through Economies of Scale and Efficient Operations. As we continue to increase our production and develop our existing properties, we expect that our unit cost structure will benefit from economies of scale. With respect to our CBM operations, we anticipate reducing unit costs by greater utilization of our existing infrastructure over a larger number of wells. We seek to exert more control over costs and timing in our exploration, development and production activities through our operating activities and relationships with our joint venture partners.

Competitive Strengths

      As a result of the following strengths, we believe we are well positioned to execute our business strategy:

	•	Substantial Rocky Mountain Undeveloped CBM Acreage Position. We believe that the Rocky Mountain region is one of the few remaining high potential CBM natural gas provinces in North America. We have assembled a substantial undeveloped acreage position in the Rocky Mountains of 246,244 gross (138,628 net) acres containing 1,061 identified drilling locations. In the Rocky Mountains, our estimated total net proved reserves of 13.1 Bcf are located on less than 1% of our net acreage.
	•	Technical Expertise. Since the beginning of our CBM operations in 1996, we have gained considerable expertise in advanced CBM drilling, completion and re-entry techniques. We also have expertise in directional and horizontal drilling relating to our waterflood recovery program in the Wilmington unit.
	•	Experienced Management Team. Our management team has 25 years of experience on average in the oil and gas industry, and our technical professionals have 17 years of experience on average in oil and gas operations. Our personnel have extensive experience in managing large-scale operations in each of our areas of concentration. Most members of our senior management have been with us since the mid-1990’s.
	•	Incentivized Management Ownership. The equity ownership of our management team is strongly aligned with that of our stockholders. As of November 30, 2004, our 14 directors and executive officers beneficially owned 5,600,544 shares of common stock, which includes exercisable options to purchase 1,425,285 shares of our common stock.

Our Properties

      Information concerning our properties is set forth in the table and narrative below:

												Planned				2005
				Gross				Net				Gross Wells				Capital
Area				Acres				Acres				in 2005				Expenditures
																(in millions)
Washakie:
	Atlantic Rim				217,845				114,796				52			$	13.6	(1)
	Pacific Rim				35,679				28,005				38				13.1
Powder River					5,190				2,535				12				1.4
Wilmington					1,440				1,242				29				18.4
Other(2)					7,800				1,990				—				—
		Total			267,954				148,568				131			$	46.5

---

(1)	Includes $4 million for the construction of compression facilities and a pipeline pursuant to our agreement with Anadarko.
(2)	Includes conventional oil and gas properties located primarily in New Mexico, Texas and North Dakota.

Washakie Basin

      The Washakie Basin is located in southeastern Wyoming and represents our largest acreage position. Our activities in this basin are focused on CBM development and are conducted through our Atlantic Rim and Pacific Rim projects.

      Atlantic Rim. Our Atlantic Rim project comprises approximately 217,845 gross (114,796 net) acres on the eastern rim of the Washakie Basin. In April 2002, we established commercial production through the 10 wells in the Sun Dog unit, our first pilot program. In September 2004, we also achieved initial gas production on the 12 wells in the Blue Sky unit, our second pilot program. Key statistics for these two units include:

	•	3,537 Mcf/d gross (861 Mcf/d net) production as of September 30, 2004 from the 10 wells in the Sun Dog unit, compared with 2,867 Mcf/d gross (692 Mcf/d net) production as of September 30, 2003;
	•	45.2 Bcf gross (9.7 Bcf net) estimated proved reserves as of June 30, 2004, based on an evaluation of 22 producing wells and their 23 proved undeveloped offsets; and
	•	22 gross (4.2 net) producing wells as of September 30, 2004.

We also have drilled 24 wells in the Doty Mountain unit, 16 wells in the Red Rim unit, and eight wells in the Jolly Roger unit, our third, fourth and fifth Atlantic Rim pilot programs. All these wells are awaiting installation of gathering and pipeline connection, which is currently in process.

      Our total Atlantic Rim capital expenditure budget for 2005 consists of $9.6 million to participate in the drilling of 52 gross wells and $4 million to construct a pipeline and related facilities with Anadarko.

      Pacific Rim. We established our Pacific Rim project in the last half of 2003. This project comprises approximately 35,679 gross (28,005 net) acres on the western rim of the Washakie Basin, approximately 60 miles west of our Atlantic Rim project. Key developments for this project include:

	•	Drilled 12 CBM wells and acquired four previously drilled wells on 160-acre spacing;
	•	Constructed a gathering system connecting nine wells in the Pacific Isle unit, our first pilot program in the Pacific Rim, which commenced pumping in June 2004;

	•	Acquired a 6 1/2-mile gas pipeline that provides access to the Kern River pipeline system; and
	•	$13.1 million capital expenditure budget for 2005 to participate in the drilling of 38 gross wells.

Powder River Basin

      The Powder River Basin is located in northeastern Wyoming. This project comprises approximately 5,190 gross (2,535 net) acres. Our operations consist primarily of developed CBM projects. Key statistics for this project include:

	•	5,896 Mcf/d gross (2,822 Mcf/d net) production as of September 30, 2004, compared with 6,943 Mcf/d gross (1,662 Mcf/d net) production as of September 30, 2003;
	•	7.9 Bcf gross (3.4 Bcf net) estimated proved reserves as of June 30, 2004;
	•	116 gross (58.1 net) producing wells as of September 30, 2004; and
	•	$1.4 million capital expenditure budget for 2005 to participate in the drilling of 12 gross wells.

Wilmington Unit

      Our Wilmington unit is located in the Wilmington field in the Los Angeles Basin of California, which has produced over 2.5 billion barrels of oil since its discovery in the 1920’s. Our Wilmington unit oil reserves are primarily proved undeveloped, or PUD. We seek to develop these reserves using directional and horizontal drilling and secondary recovery techniques, such as a waterflood recovery program. Key statistics for our position in this unit include:

	•	416 Bbls/d gross (219 Bbls/d net) production as of September 30, 2004, compared with 494 Bbls/d gross (169 Bbls/d net) production as of September 30, 2003;
	•	23.1 MMbbls gross (14.1 MMbbls net) estimated proved reserves as of June 30, 2004, 97% of which are PUDs;
	•	31 gross (14.6 net) producing wells as of September 30, 2004; and
	•	$18.4 million capital expenditure budget for 2005 to participate in the drilling of 29 gross wells.

Recent Development — Purchase of Wilmington Interest and Settlement of Magness Petroleum Company Arbitration

      In November 2004, we entered into agreements with Magness Petroleum Company, our joint venture partner and operator of the Wilmington field, for the purpose of purchasing its interests in the Wilmington unit and settling all disputes and arbitration between us. As part of this transaction, we will purchase for $14.8 million and the assumption of certain performance obligations, all the interests of Magness Petroleum in the Wilmington unit, together with existing wells, equipment and certain surface properties. Also as part of this transaction, all awards, findings and/or judgments, including a pending $1.6 million arbitration award in our favor, will be vacated and all proceedings will be dismissed. The transaction is required to be completed on or before January 31, 2005. We will not use any portion of the proceeds from this offering for this transaction.

      Upon closing the purchase and sale agreement, the parties will terminate their joint venture agreement dated May 24, 1999, Magness Petroleum shall resign as operator of the Wilmington unit, and we or our designee shall be appointed operator. We intend to resume drilling in the Wilmington unit as promptly as practicable after the closing.

      Upon consummation of the transaction with Magness Petroleum, our estimated total proved natural gas and oil reserves, as of June 30, 2004, adjusted as if the acquisition had occurred on June 30, 2004, would be approximately 124.1 Bcfe and the PV-10 value of these reserves would be approximately $236.2 million.

Risk Factors

      The competitive strengths that we maintain, the implementation of our business strategy and our future operating results and financial condition are subject to a number of risks and uncertainties, including the accuracy of reserve estimates, volatility of natural gas and oil prices, the possibility of environmental delays and restrictions impeding our activities, our obligations to repurchase drilling program interests and other factors. The factors that could adversely affect our actual results and performance, as well as the successful implementation of our business strategy, are discussed under “Risk Factors” beginning on page 12.

Our Executive Offices

      Our executive offices are located at 489 Fifth Avenue, 32nd Floor, New York, NY 10017, and our telephone number is (212) 697-9660. Warren E&P, Inc. is headquartered at 123 West 1st Street, Suite 505, Casper, WY 82601. Information contained on our website, www.warrenresources.com, is not intended to be part of this prospectus.

The Offering

Common stock offered by us		6,000,000 shares
Common stock to be outstanding after this offering		29,409,706 shares
Use of proceeds		We intend to use the proceeds from this offering primarily to accelerate and fund our exploration and development activities in the Atlantic Rim and Pacific Rim projects of the Washakie Basin, as well as in the Wilmington unit and Powder River Basin.
Over-allotment option		We have granted to the underwriters an option to purchase up to an additional 900,000 common shares solely to cover over-allotments.
Nasdaq National Market Symbol		WRES

      The number of common shares to be outstanding after the offering is based on shares outstanding as of November 30, 2004. The number of shares of our common stock to be outstanding after this offering does not include 17,498,928 shares issuable upon the exercise and conversion of the following:

	•	2,625,206 shares are issuable upon exercise of stock options with a weighted average exercise price of $5.66 per share;
	•	1,649,375 shares are issuable upon exercise of class A warrants at an exercise price of $10.00 per share;
	•	1,468,750 shares are issuable upon exercise of class B warrants at an exercise price of $12.50 per share;
	•	5,194,788 shares are issuable upon conversion of outstanding bonds with a weighted average exercise price of $7.22 per share; and
	•	6,560,809 shares are issuable upon conversion of preferred stock with a conversion price of $12.00 per share.

      Unless otherwise stated, all information contained in this prospectus assumes no exercise of the over-allotment option granted to the underwriters.

Summary Consolidated Historical Financial Data

      This section presents our summary consolidated historical financial data. You should read carefully the consolidated financial statements included in this prospectus, including the accompanying notes. The summary consolidated historical financial data is not intended to replace the consolidated financial statements.

      We derived the statement of operations data and statement of cash flows data for the years ended December 31, 2003, 2002 and 2001, and the balance sheet data as of December 31, 2003 and 2002 from our audited consolidated financial statements included in this prospectus. We derived the statement of operations data and statement of cash flows data for the nine months ended September 30, 2004 and 2003, and the balance sheet data as of September 30, 2004, from the unaudited consolidated financial statements included in this prospectus. The interim unaudited consolidated financial statements have been prepared on the same basis as the annual audited financial statements and include, in the opinion of management, all adjustments consisting of normal and recurring adjustments necessary to present fairly the data for such periods and may not necessarily be indicative of full year results.

																Nine Months Ended
				Year Ended December 31,												September 30,
				2003				2002				2001				2004				2003
																(unaudited)
Statement of Operations Data:
Revenues:
	Turnkey contracts with affiliated partnerships				$11,301				$  5,841				$ 30,103				$ 7,109				$ 4,276
	Oil and gas sales from marketing activities				5,621				11,272				14,867				4,572				4,150
	Well services				1,168				1,895				5,574				799				823
	Oil and gas sales				5,717				593				948				4,533				4,244
		Total revenues			23,807				19,601				51,492				17,013				13,493
Costs and operating expenses:
	Turnkey contracts				7,285				4,965				25,953				8,302				3,277
	Cost of marketed oil and gas purchased from affiliated partnerships				5,500				11,121				15,299				4,465				4,067
	Well services				662				839				3,519				410				448
	Production and exploration				3,812				1,326				568				3,168				2,565
	Depreciation, depletion, amortization and impairment				3,249				9,930				14,462				2,662				806
	General and administrative				4,496				6,278				5,485				3,292				2,911
	Contingent repurchase obligation				—				(3,065	)			3,319				—				—
		Total costs and operating expenses			25,004				31,394				68,605				22,299				14,074
Income (loss) from operations					(1,197	)			(11,793	)			(17,113	)			(5,286	)			(581	)
Other income (expense):
	Interest and other income				1,340				5,258				1,977				1,406				986
	Interest expense				(1,528	)			(6,313	)			(5,776	)			(374	)			(1,334	)
	Gain on sale of oil and gas properties				494				4,287				—				120				515
	Net gain (loss) on investment				21				464				(10	)			(39	)			57
		Total other income (expense)			327				3,696				(3,809	)			1,113				224
Loss before income taxes, extraordinary item and cumulative effect of change in accounting principle					(870	)			(8,097	)			(20,922	)			(4,173	)			(357	)
	Income tax expense (benefit)				129				(471	)			152				(92	)			—
Loss before minority interest and cumulative effect of change in accounting principle					(999	)			(7,626	)			(21,074	)			(4,081	)			(357	)
	Minority interest				(112	)			—				—				(111	)			(138	)