NOTE L — ACQUISITIONS

Marcellus Assets

On August 11, 2014, we acquired essentially all of 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 will provide us a new area of operations in the Marcellus Shale in Pennsylvania. The Acquisition of Marcellus Assets was accounted for as a business combination in accordance with Accounting 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 (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

In connection with the Citrus acquisition, a contingent consideration payment was included as part of the purchase and sale agreement 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.

The following table presents the initial purchase price allocation of the Marcellus Asset, based on the fair values of assets acquired and liabilities assumed (in thousands):

	2014
Proved oil and gas properties	$	171,070
Unproved oil and gas properties	184,752
Total purchase price	$	355,822

Pro Forma Impact of Acquisitions (Unaudited)

The following unaudited pro forma combined results of operations are provided for the three months ended March 31, 2014 as though the Acquisition of the Marcellus Assets had occurred prior to that date. The pro forma combined results of operations for the three months ended March 31, 2014 have been prepared by adjusting the historical results of the Company to include the historical results of the Marcellus Assets. 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.

The Company’s historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the Citrus Acquisition that were factually supportable. Adjustments and assumptions made for this pro forma calculation are consistent with those used in the Company’s pro forma information previously filed with the SEC.

	For the Three Months
	Ended March 31,
(in thousands)	2014
Revenues	$	62,559
Income (loss) from Operations	24,510

Net income (loss)	$	7,742
Diluted net income (loss) per share	$	0.10