Case Document 367 Filed in TXSB on 11/04/16 Page 1 of 6

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1 Case Document 367 Filed in TXSB on 11/04/16 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION IN RE WARREN RESOURCES, INC., et al., 1 Debtors. Case No (MI) Chapter 11 Jointly Administered APPLICATION OF LUCAS R. NARDINI, INDIVIDUALLY AND AS TRUSTEE OF THE MARY F. NARDINI ADMINISTRATIVE TRUST U/A SIX, AND ROY E. PREVOST FOR CURE CLAIM Lucas R. Nardini ( Nardini ), individually and as Trustee of the Mary F. Nardini Administrative Trust U/A Six (the Nardini Trust ), and Roy E. Prevost ( Prevost, and together with Nardini and the Nardini Trust, the Lessors ), by and through their undersigned counsel, by way of Application for Cure Claim (the Application ), hereby state JURISDICTION AND VENUE 1. The United States Bankruptcy Court for the Southern District of Texas (the Bankruptcy Court ) has jurisdiction over this matter pursuant to 28 U.S.C and paragraph 45 of the Confirmation Order (as defined herein). 2. Venue is proper pursuant to 28 U.S.C The statutory basis for the relief requested herein is Sections 105(a) and 365(b) of title 11 of the United States Code (the Bankruptcy Code ). 1 Debtors in these cases, along with the last four digits of each Debtor s federal tax identification number, are (i) Warren Resources, Inc. (4080); (ii) Warren E&P, Inc. (4052); (iii) Warren Resources of California, Inc. (0072); (iv) Warren Marcellus, LLC (0150); (v) Warren Energy Services, LLC (4748); and (vi) Warren Management Corp. The Debtors service address is 11 Greenway Plaza, Suite 3050, Houston, Texas

2 Case Document 367 Filed in TXSB on 11/04/16 Page 2 of 6 BACKGROUND A. The Debtors Plan 4. On June 2, 2016 (the Petition Date ), Warren Resources, Inc. and its affiliated debtor entities (the Debtors ), each filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. 5. On June 16, 2016, the Debtors filed their Disclosure Statement to Accompany Plan of Reorganization of Warren Resources, Inc. and its Affiliated Debtors [Docket No. 96] (the Disclosure Statement ) and Plan of Reorganization of Warren Resources, Inc. and its Affiliated Debtors [Docket No. 97] (the Plan ). 6. On July 25, 2016, the Bankruptcy Court entered an Order approving the Disclosure Statement [Docket No. 236]. 7. On September 14, 2016, the Bankruptcy Court entered an Order confirming the Plan [Docket No. 342] (the Confirmation Order ). 8. Paragraph 8 of the Confirmation Order provides that the Debtors oil and gas leases (the Oil and Gas Leases ) are assumed by the Debtors to the extent that the Oil and Gas Leases are unexpired leases of non-residential real property for the purposes of Section 365(d)(4). 9. Paragraph 8 also states that [n]othing in this Confirmation Order shall be deemed a finding or determination that any Oil and Gas Leases constitute unexpired leases of nonresidential real property for purposes of Section 365(d)(4). 10. Pursuant to paragraph 20 of the Confirmation Order, any party seeking a cure claim for an executory contract or unexpired lease assumed under the Plan and the Confirmation Order must file with the Bankruptcy Court an application for such cure claim on or before thirty (30) days of the Effective Date. 2

3 Case Document 367 Filed in TXSB on 11/04/16 Page 3 of On October 5, 2016, the Debtors issued the Notice of Occurrence of Effective Date of Plan of Reorganization of Warren Resources, Inc. and its Affiliated Debtors. 12. Accordingly, pursuant to paragraph 20 of the Confirmation Order, any applications for cure claims must be filed on or before November 4, B. The Nardini and Prevost Oil and Gas Leases 13. On or about February 16, 2008, the Estate of Mary F. Nardini, deceased, as lessor, entered into an Oil and Gas Lease with Magnum Land Services, LLC, as lessee (the Nardini Lease ). The Nardini Lease covers property located in Wyoming County, Pennsylvania and was recorded in Wyoming County under instrument no Nardini and the Nardini Trust are the current holders of the lessor s interest under the Nardini Lease. Warren Resources, Inc., Warren Marcellus, LLC and/or Warren E&P, Inc., are the current holders of the lessee s interest under the Nardini Lease. 14. On or about January 2, 2008, Prevost, as lessee, entered into an Oil and Gas Lease with Magnum Land Service, as lessee (the Prevost Lease, and together with the Nardini Lease, the Leases ). The Prevost Lease covers property located in Wyoming County, Pennsylvania and was recorded in Wyoming County under instrument no Warren Resources, Inc., Warren Marcellus, LLC and/or Warren E&P, Inc., are the current holders of the lessee s interest under the Prevost Lease. RELIEF REQUESTED 15. The Lessors have filed a motion requesting that, inter alia, the Court enter an order determining that the Leases were not assumed by the Debtors pursuant to the Confirmation Order. 3

4 Case Document 367 Filed in TXSB on 11/04/16 Page 4 of The Leases were not assumed by the Debtors pursuant to the Confirmation Order because the Leases do not constitute unexpired lease[s] of nonresidential real property for the purposes of Section 365(d)(4) of the Bankruptcy Code. 17. Pennsylvania law has evolved to unequivocally establish that rights to oil and gas are to be treated as transfers of estates in property and not leaseholds. Nolt v. TS Calkins & Assocs., LP, 96 A.3d 1042, 1047 n.3 (Pa. Super. 2014); see also Sabella v. Appalachian Dev. Corp., 103 A.3d 83, 103 (Pa. Super. 2014) ( [A]n oil and gas lease, upon vestiture arising from successful discovery and production of oil, conveys a potential indefinite fee simple determinable ). 18. Consequently, under Pennsylvania law, the Leases created fee simple determinable interests that are not unexpired leases of real property for the purposes of Section 365(d)(4) and therefore, were not assumed pursuant to the Confirmation Order. 19. Accordingly, the Lessors submit this Application in order to preserve the cure claims the Lessors will have if, for any reason, the Court ultimately determines that the Leases are unexpired leases of nonresidential real property. 20. In the event the Court finds that, notwithstanding Pennsylvania law, the Leases were assumed by the Debtors pursuant to Section 365(d)(4) of the Bankruptcy Code and the Confirmation Order, the Lessors request that the Court determine the appropriate cure that Debtors will be obligated to perform in connection with their assumption of the Leases. CONCLUSION 21. For the foregoing reasons, the Lessors respectfully request that the Court establish the appropriate cure that Debtors will be obligated to perform, in the event the Court determines that the Leases are unexpired leases of nonresidential real property for the purpose of Section 365(d)(4) of the Bankruptcy Code and were assumed pursuant to the Confirmation Order. 4

5 Case Document 367 Filed in TXSB on 11/04/16 Page 5 of 6 Dated November 4, 2016 Respectfully submitted, OF COUNSEL Ira Neil Richards Richard A. Barkasy Daniel M. Pereira SCHNADER HARRISON SEGAL & LEWIS LLP 1600 Market Street, Suite 3600 Philadelphia, PA (215) (215) FAX Aaron D. Hovan Attorney at Law 154 Warren Street Tunkhannock, PA (570) /s/ Paul D. Clote Paul D. Clote Federal Bar No Texas Bar No McGINNIS, LOCHRIDGE & KILGORE, LLP Pennzoil Place/South Tower 711 Louisiana, Suite 1600 Houston, TX (713) (713) FAX pclote@mcginnislaw.com Attorneys for Lucas R. Nardini, Individually and as Trustee of the Mary F. Nardini Administrative Trust U/A Six, and Roy E. Prevost 5

6 Case Document 367 Filed in TXSB on 11/04/16 Page 6 of 6 CERTIFICATE OF SERVICE The undersigned hereby certifies that on November 4, 2016, the foregoing document was served by ECF on the parties registered to receive electronic notices. By /s/ Paul D. Clote Paul D. Clote 6

7 Case Document Filed in TXSB on 11/04/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION INRE Case No (MI) WARREN RESOURCES, INC., et al., 1 Chapter 11 Debtors. Jointly Administered ORDER GRANTING APPLICATION OF LUCAS R. NARDINI, INDIVIDUALLY AND AS TRUSTEE OF THE MARY F. NARDINI ADMINISTRATIVE TRUST UIA SIX, AND ROY E. PREVOST FOR CURE CLAIM Upon the Application of Lucas R. Nardini, Individually and as Trustee of the Mary F. Nardini Administrative Trust UIA Six, and Roy E. Prevost for Cure Claim (the "Application,,)2; and this Court having determined that it has jurisdiction over this matter, that this is a core proceeding, that venue of this proceeding and the Application in this district is proper; and this Court having authority to enter a final order; and this Court having found that the Lessors are entitled to the relief requested in the Application; and upon the record herein; and after due deliberation and sufficient cause appearing therefore, it is HEREBY ORDERED THAT 1. The Application is GRANTED; and 2. In the event that the Court determines the Leases are unexpired leases of nonresidential real property for the purpose of Section 365(d)(4) ofthe Bankruptcy Code and were assumed pursuant to the Confirmation Order, the Court will establish the appropriate cure that Debtors will be obligated to perform. 1 Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are (i) Warren Resources, Inc. (4080); (ii) Warren E&P, Inc. (4052); (iii) Warren Resources of California, Inc. (0072); (iv) Warren Marcellus, LLC (0150); (v) Warren Energy Services, LLC (4748); and (vi) Warren Management Corp. The Debtors' service address is 11 Greenway Plaza, Suite 3050, Houston, Texas Capitalized terms not defined herein shall have the meanings ascribed to them in the Motion. PHDATA

8 Case Document Filed in TXSB on 11/04/16 Page 2 of 2 Signed Houston, Texas _ THE HONORABLE MARVIN P. ISGUR UNITED STATES BANKRUPTCY JUDGE 2 PHDATA