NOTE N—ACQUISITIONS

Marcellus Assets

On August 11, 2014, we acquired essentially all of the Marcellus Assets (the "Marcellus Assets") of Citrus Energy Corporation ("Citrus") and two other working interest owners in exchange for approximately 6.7 million shares of our common stock valued at $41.4 million and cash consideration of $312.5 million, subject to certain post-closing adjustments and certain closing conditions (the "Citrus Acquisition"). The Citrus Acquisition provides us a new area of operations in the Marcellus Shale in Pennsylvania. The Citrus Acquisition was accounted for as a business combination in accordance with Accountant Standards Codification (ASC) No. 805, Business Combinations (ASC 805) which, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair values. The purchase price of the Marcellus Assets was as follows (in thousands):

	2014
Cash Consideration	$	312,500
Fair Value of Warren Equity Common Shares		41,400
Closing Adjustments		(7,828	)
Fair Value of Earn-Out Provision		6,340
Fair Value of Farm-Out Provision		3,410

Total purchase price	$	355,822

The Company completed its assessment of the fair values of the assets acquired and liabilities assumed by December 31, 2014. The following table presents the purchase price allocation of the Marcellus Assets as of December 31, 2014, based on the fair values of assets acquired and liabilities assumed (in thousands):

	2014
Proved Oil and Gas Properties	$	171,383
Unproved Oil and Gas Properties		184,752
Asset Retirement Obligations		(313	)

Total purchase price	$	355,822

In connection with the Citrus Acquisition, a contingent consideration payment was included as part of the purchase price with a maximum payout of $8.5 million, based upon proved reserves and price differential factors. The fair value of this consideration is based on a 90% probability of achieving the full payout discounted to present value.

Pro Forma Impact of Acquisition (Unaudited)

The following unaudited pro forma combined results of operations are provided for the year ended December 31, 2014 as though the Citrus Acquisition of the Marcellus Assets had occurred on January 1, 2014. The pro forma combined results of operations for the year ended December 31, 2014 have been prepared by adjusting the historical results of the Company to include the historical results of the Marcellus Assets to give effect to the pro forma events that were directly attributable to the Citrus Acquisition that were factually supportable. These supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the period presented or that may be achieved by the combined company in the future. The pro forma results of operations do not include any cost savings or other synergies that resulted, or may result, from the Citrus Acquisition. Future results may vary significantly from the results reflected in this unaudited pro forma financial information because of future events and transactions, as well as other factors.

	For the Year Ended December 31, 2014
	(in thousands)
Revenues	$	212,518
Income (loss) from Operations	$	57,800
Net income	$	52,395
Diluted net income per share	$	0.65