Warren Resources Sets 2006 Capital Budget

Warren Resources reports a 2006 capital expenditure budget of $108 million, representing an approximate increase of 260% from 2005 and issued guidance for the 2006 fiscal year. Warren plans to fund the 2006 capital expenditure budget using a portion of the proceeds of its 6,000,000 common share follow-on offering, cash on hand and internally generated cash flow from operations.

FY 2006 CAPITAL SPENDING PLAN

We currently plan to drill or recomplete 155 new wells (121.9 net) in 2006. Approximately $103 million of the 2006 capital budget will fund drilling expenditures, representing an approximate 315% increase over our 2005 drilling expenditures.

The amount and allocation of actual capital expenditures will depend upon a number of factors, including the impact of oil and gas prices, variances in drilling and service costs, the timing of our drilling wells and variances in forecasted production.

WILMINGTON TOWNLOT UNIT

We currently plan to spend approximately $61 million or 56% of our total 2006 budgeted drilling expenditures in our Wilmington Townlot Unit in the Los Angeles Basin of California. This drilling capital will be allocated to the drilling of 45 development wells and 26 water injection wells with an average working interest of 98.5%, and other various development activities.

WASHAKIE BASIN

We currently plan to spend approximately $33 million or 30% of our total 2006 budgeted drilling expenditures in our Washakie Basin project in Wyoming. This drilling capital will be allocated to the drilling of 63 wells with an average working interest of 50% and other various development activities.

NORTH WILMINGTON UNIT

In addition to the acquisition cost of $23 million for the purchase of the North Wilmington unit ("NWU"), which is scheduled to close on December 30, 2005, we plan to spend approximately $10 million or 9% of our total 2006 budgeted drilling expenditures in the NWU. The NWU is an 875 acre unitized oil field adjacent to our Wilmington Townlot Unit in the Los Angeles Basin of California. This NWU drilling capital will be allocated to the drilling and recompleting of 20 wells with a working interest of 100% and other various development activities.

Norman F. Swanton, Chairman & CEO of Warren Resources commented, "2006 will be a year of significant growth for the Company. With our large-scale drilling projects moving to full development in both California and Wyoming, our challenge is to maximize our resources for the best return for our shareholders. In 2006, we will be very intently focused on our development drilling. The California properties will now have proved reserves of over 49 million barrels of oil net to Warren. Upon completion of the environmental impact statement for the Atlantic Rim project of the Washakie Basin, we will have the flexibility to accelerate the drilling pace with our joint venture partner Anadarko Petroleum. We look forward to capitalizing on the Company's large acreage positions in both areas."

2006 Guidance

Warren provides the following updated forecast for production and capital expenditures based upon the information available at the time of this release. Please see the forward-looking statement at the end of this release for more discussion of the inherent limitations of this information.

                        First Quarter ending     Year ending
                           March 31, 2006     December 31, 2006
                       -----------------------------------------
Production:
Oil (MBbl)                     97 - 110            700 - 800
Gas (MMcf)                     275- 288         1,150 -1,250
Gas Equivalent (MMcfe)        857 - 948        5,350 - 6,050
Capex Budget (in
 thousands)                     $23,400             $108,100

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