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CORRESP
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[PATTON BOGGS LETTERHEAD]

September 8, 2005

Ms. April Sifford

Branch Chief

Division of Corporation
Finance

Securities and Exchange
Commission

450 5th Street, N.W. -
Judiciary Plaza

Washington, D.C. 20549-0405

  Attn:

  Gary Newberry

  Re:

  Warren
  Resources, Inc.

  Registration
  Statement on Form S-3

  Filed
  on June 15, 2005

  File
  No. 333-125835

  Form 10-K
  for Fiscal Year Ended December 31, 2004

  SEC
  File No. 0-33275

Dear Ms. Sifford:

This
letter includes the responses of Warren Resources, Inc. (the “Company”),
as provided to us, with respect to comments made by the Staff of the Commission
in its letter dated August 17, 2005, regarding the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2004.  This letter is being filed via EDGAR
simultaneously.

Upon
your review of our responses, including our prior responses to the Staff’s
earlier comments, and your statement that you have no further comments, we will
file, via EDGAR, Amendment No. 1 to our Form 10-K that includes the
amended language.

Enclosed
in the courtesy copy package delivered to Mr. Newberry are three copies of
this letter and its enclosures for the use of the Staff in reviewing the
proposed amendments to our Form 10-K.

Form 10-K for the Fiscal Year Ended December 31,
2004

Consolidated Balance Sheets,

8% Convertible Preferred Stock, page F-3

Staff
Comment 1, part 1.
Please advise us…how you determined that permanent equity classification
of your Series A convertible preferred stock is appropriate since a
presumption of cash settlement could be in order.

In the Staff’s
analysis of EITF 00-19, we concur that under paragraph 7, if the contract
provides the Company with a choice of net-cash settlement or settlement in
shares, the Model assumes settlement in shares, as is the Company’s right under
the Series A convertible preferred stock. We also note that under
paragraph 7, the equity Model applies to contracts that have settlement
alternatives with different economic values if the reason for the difference is
a limit on the number of shares that must be delivered by the issuer pursuant
to a net-share settlement alternative, which is the case with the Company’s Series A
convertible preferred stock, as a maximum limit has been established for the
number of shares of common stock that the Company would need to issue to
satisfy preferred stock redemptions.

We disagree, however, with your conclusion that cash
settlement is the more economic alternative in the existing situation.

The Company’s belief that the cash settlement is not
the more economic alternative is based on two separate sets of rational:

I.              At the time of issuance of the
preferred stock in 2002, the Company’s good faith estimate of the fair value of
its restricted common stock was $2.28 per share.  This is because, as set forth in the
management valuation analysis attached as Exhibit A hereto, at that time,
$2.28 per share for a private transaction in 2002 was the only comparable price
available.  By the time of additional
preferred stock issuances in 2003, the Company still had only the 2002
transaction at $2.28 per share to value its common stock.  The Company also was aware that, by 2003,
fundamentals had improved somewhat, but knew that any price appreciation could
not be to a valuation of $8.00 per share.
(In fact, by 2004, this price appreciation led to additional
transactions at $6.375 per restricted share – as set forth in Exhibit A.)

Given the fixed
maximum number of common shares that the Company could deliver to satisfy a
redemption of the preferred stock, payment of the redemption in common stock
was the more economic alternative because, at the time of issuance of the
preferred stock, the fair market value of the restricted common stock was less
than $8.00 per share as shown by the following:
Given the cash redemption price of $12 per share of preferred stock, and
the limitation of issuing a maximum of 1.5 shares of common stock to fully
redeem 1.0 share of preferred stock, if the fair value of the restricted common
stock is less than $8.00 per share at the time of redemption, the Company would
receive a premium, rather than a discount, if it were to use its common stock,
rather than cash, to pay for the redemption. For example, if the Company’s
restricted common stock had a fair value of $6.375 per restricted common share,
and if a preferred holder had 100,000 shares of preferred stock, the cash
redemption price would be $12.00 per share, and the Company would deliver the
maximum of 150,000 shares of common stock, having a fair value of $956,250, in
satisfaction of the $1,200,000 cash redemption cost.

Because
at the time of issuance of the preferred stock – and even thereafter – any
sales of restricted common stock were at prices of less than $8.00 per share,
and this price level resulted in payment of restricted shares of common stock
being the more economic alternative, it was appropriate for the Company to
conclude that upon redemption the Company would deliver the maximum number of
shares, rather than cash, in satisfaction of the redemption request.

II.            Your analysis also appears to be
predicated on the conclusion that, if unregistered common stock is used, the
additional 25% of shares of unregistered stock necessary to equal the
redemption price value is a penalty.  To
the contrary, the Company believes that, pursuant to the provisions of
paragraph 16 of EITF 00-19, the fair value of these restricted shares do
not constitute a penalty, but represent a reasonable discount from the
corresponding value of fully registered publicly tradable shares. In this
regard, EITF 00-19, paragraph 16 provides as follows:

“[I]n
case of delivery of unregistered shares, a discount from the value of the
corresponding registered shares that is a reasonable estimate of the difference
in fair values between registered and unregistered shares (that is, the
discount reflects the fair value of the restricted shares determined using
commercially reasonable means) is not considered a penalty.”

And Release 33-7390
states the following in recognizing the reasonableness of a discount for
restricted shares:

“Issuers typically
must offer restricted shares at a discount relative to prices at which their
unrestricted shares trade in the public markets.  In recent years, this discount has generally
ranged from 20-50%.”

2

Under the terms of the
preferred stock, if the Company elects to pay for the redemption with common
stock, the Company can deliver that number of restricted shares that is 1.25
times the number of registered, freely tradable shares whose aggregate market
price is equal to the redemption price (i.e., to redeem one $12 preferred
share, the Company would deliver $15 of restricted common shares, which are
estimated to have a discounted fair value of $12, or 12/15ths, which equals a
20% discount from their value if registered and tradable.).  This represents a 20% discount for the
difference in fair value of restricted shares as compared with freely tradable
shares.  In accordance with
paragraph 16 of EITF 00-19, this 20% discount is a reasonable
estimate of the difference in fair values between registered and unregistered
shares, and is not considered a penalty.
Exhibit A hereto also includes additional analysis related to the
discount to be used for the Company’s restricted stock.

Therefore, as a result of the difference in fair value
between restricted stock and freely tradable stock and the maximum limitation
on the amount of shares needed to satisfy preferred stock redemptions, the
Company’s right to settle in such restricted shares is the more economic
alternative and permanent equity classification of the Company’s preferred
stock is appropriate.

Staff
Comment 1, part 2.
Please advise us … In light of the guidance in paragraph 16 of EITF 00-19
(and the related discussion in paragraph 8), how you determined that you were
not required to bifurcate the redemption feature embedded within the Series A
convertible preferred stock and separately account for this feature as a
derivative under SFAS 133.

With
respect to the Staff comment about separately accounting for the redemption
feature as a derivative under SFAS 133, we believe we have properly reported
this item in accordance with paragraph 11(a) of SFAS No. 133, which
states that a derivative is excluded from the scope of SFAS No. 133 if it
is both indexed to a company’s own stock and is classified in equity.

Staff
Comment 2. We also note that the language of the offering
document does not appear to be replicated in the preferred stock certificate
itself that we found as an exhibit to your Form 10-Q for the period ended June 30,
2004. Please also provide us with a copy of the amendment or restated preferred
stock certificate which reflects the terms described in the offering document
for the preferred stock.

The
terms described in the offering document for the preferred stock are included
in the Certificate of Correction to the Articles Supplementary, which was filed
with the Maryland Secretary of State on August 26, 2005. A copy of the
Certificate is included with this correspondence.

General
Information

Please
call me at (303) 894-6378 with any questions or comments or requests for any
additional information.  Thank you for
your attention to this filing.

  Very truly
  yours,

  /s/ ALAN L.
  TALESNICK

  ALT/cw

  Alan L.
  Talesnick

3

Exhibit A

WARREN RESOURCES, INC.

COMMON STOCK VALUATION ANALYSIS

In issuing the Series A convertible preferred
stock in 2002 and 2003, at a time when Warren Resources, Inc. had no
publicly trading stock, and in setting the discount for the value of its
restricted common stock, as compared with what the value would be for the
Company’s common stock if it were trading in the public market (when it was
not), given that the restricted common stock could be issued to satisfy
redemption of the preferred stock, Warren Resources, Inc. (the “Company”)
sought to make a good faith fair value analysis and applied the three principal
factors set forth in ASR 113 and ASR 118 (now codified within Section 403
and 404 of the Codification of Financial Reporting Policies) that should be
considered in conducting a fair valuation of restricted stock, which are:

(1) the fundamental analytical data relating to
the investment,

(2) an evaluation of the forces which influence
the market in which these securities are purchased and sold; and

(3) the nature and duration of restrictions on
disposition of the securities.

Applying these standards,
at time of issuance of the preferred stock, the Company’s analysis was as
follows:

(1) Fundamental
Analytical Data Relating To The Investment - Financial Condition.
As reflected in the Company’s Form 10-Q for the quarter ended September 30,
2002, immediately prior to the issuance of the preferred stock, the Company had
a negative net worth of $0.45 per share; a comparative decline in revenue from
$15.1 million for the comparable quarter in 2001 to $5.7 million for the
quarter in 2002, and reported a loss of $1.1 million for the 2002 third quarter
in comparison to a loss of $0.5 million for the same period in 2001.
Additionally, the Company’s current assets had declined from $35.7 million at December 31,
2001 to $14.8 million at September 30, 2002. Based upon its financial
condition, the Company believed that the fair value of the restricted common
stock would be at least 20% less than any registered and publicly tradable
common stock, if such a security had existed at that time.  (Note:
Although the Company filed periodic reports under the Securities
Exchange Act of 1934 during 2002, 2003, and 2004, its stock was not publicly
traded until its initial public offering in December 2004.)

(2) Forces Which
Influence The Market In Which These Securities Are Purchased And Sold

A. No Trading Market and Lack Of
Marketability. At time of issuance of the preferred stock,
there was no trading market for either the preferred stock or the underlying
common stock, and there were express restrictions from the resale or transfer
of both the preferred stock and the common stock. There was no public market
for the preferred stock or the common stock, nor had any preferred or common
stock ever been, publicly traded or publicly listed. According to the Institutional Investor
Study Report of the Securities and Exchange Commission; U.S. G.P.O. (March 31,
1971), discount rates were greatest for restricted stocks whose unrestricted
counterparts traded over-the-counter, followed by the American Stock Exchange
and finally the New York Stock Exchange. In the Institutional Investor Study, discounts
for all companies averaged 23.1%. Our common stock did not trade
over-the-counter or on any exchange.

B. Comparable Sales of
Unregistered Common Stock. ASR 118 expressly requires
consideration of the specific factor of “information as to any transactions or
offers with respect to the security.”  In
setting the preferred stock terms and conditions, the Company looked at
comparable transactions consisting of sales of the Company’s unregistered
common stock during 2002 and 2003 as follows:

2002. The only sales
transaction in the Company’s common stock of which the Company is aware
occurred when the Company purchased 702,500 shares of restricted common stock
from the Estate of Gregory S. Johnson for $2.28 per share.

2003. We are not aware of
any sales of our restricted common stock during 2003.

At the time of issuance of the preferred stock in 2002
and 2003, the only comparable transaction was the 2002 transaction at $2.28 per
share of registered common stock.  It is
reasonable to conclude that this price represented a discount of at least 20%
from what the value of any freely tradable shares would have been at that time.

Subsequently, in 2004, the following occurred:

2004. After
the issuance of the preferred stock in 2002 and 2003, the Company sold, in
2004, 5,875,000 units, consisting of 5,875,000 restricted shares of common
stock and 2,937,500 warrants, to Wellington Management Company, LP, and other
institutional investors for a price of $7.00 per unit.  The first of these sales occurred in February 2004.  Applying a Black-Scholes analysis to the
transaction, the restricted common stock was valued at $6.375 per share and the
warrant portion of each unit was valued at $0.625.

In the Company’s case, because of such extreme lack of
marketability with no available or certain future public market where the
holder could sell the common stock and, as a result, any sale had to be
privately negotiated and arranged by a holder, a discount of at least 20% for
the Company’s restricted common stock was deemed reasonable and appropriate.

(3) The Nature And
Duration Of Restrictions On Disposition Of The Securities - Resale Agreements.

The preferred stock and the underlying common stock
are unregistered securities with no unconditional right to demand registration.
According to the Commission’s Institutional Investor
Study, even when a purchaser had negotiated a resale or registration
rights agreement, a greater discount by an issuer and a purchaser occurred
where (i) a change in the underlying value of the stock would have
prompted the holder to sell absent the restrictive provisions, and (2) the
contemplated means of legally disposing of the stock may not materialize. In
the Company’s case, the preferred stockholders have no unconditional right to
demand a registration, and no request for registration has ever been requested.
In addition to the other factors, as a result of the extensive resale
restrictions, the Company believed the at-least-20% discount for restricted
common stock was a reasonable fair value valuation estimate.  Secondly, at the time of issuance of the
preferred stock, there was no foreseeable trading market for either the common
stock or the preferred, and,