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WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc

Vanguard Natural Resources, Llc · Dec 10, 2008 · 18 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 1
    Wachovia Pipeline and Energy MLP Symposium New York City December 9-10, 2008
  2. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 2
    Overview of Vanguard Natural Resources Upstream Energy LLC, headquartered in Houston Initial Public Offering VNR NYSE Arca October 2007 Increased distributions 18% since IPO Generating stable cash flow in current volatile…
  3. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 3
    Company Profile Company Profile (1) Equity Market Cap 96 million Total Debt 135 million Enterprise Value 231 million (1) Market data as of November 13, 2008 (VNR closing price of 7.65). Positive cash distribution coverage…
  4. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 4
    Vanguard Investment Highlights High quality, long lived reserves with stable production profile Recent acquisitions in the Permian Basin and South Texas balance the commodity and geographic mix and support 18% distribution…
  5. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 5
    Appalachian Asset Profile High degree of step out development success Targeting low-risk, multiple producing horizons Brushy Branch Lewis Heirs Smepa 500+ identified PUD/Probable locations Premium pricing due to proximity to…
  6. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 6
    Devonian Shale Potential Development of the Devonian shale through horizontal drilling is taking place NGAS in the southern portion of the VNR 7 wells Initial Appalachian Basin well, 400 375-400 Mcf/d VNR Participation Mcf/d…
  7. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 7
    Permian Basin Asset Profile Acquisition of producing assets Lovington Field West Field from Apache, closed 1/31/08 Establishes Permian Basin as an Robertson N Field Hobbs Field operating area, approx. 50 operated wells in 7…
  8. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 8
    South Texas Assets Acquisition from Lewis Energy, closed July 2008 (60/40 cash and stock transaction) Lewis to operate and conduct PUD drilling program through 2013 (6-8 wells per year) As largest operator in the Olmos trend…
  9. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 9
    Advantages of Vanguards LLC Structure LLC Partnership structure results in lower cost of capital No entity level income tax Tax Shield minimum 70% of distributions through 2010 will be tax deferred (2007 -100%) Unitholders…
  10. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 10
    Prudent Financial Strategy Maintain strong, flexible balance sheet Credit Facility in place through March 2011 175 million borrowing base, 40 million available Maintain strong distribution coverage Maximize productivity of…
  11. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 11
    Financial Overview 12
  12. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 12
    Comparable Company Distribution Yields Current Distribution Yields of Peer Group* 60% 49.2% 50% 47.1% 40% 27.8% 30% 26.1% 21.6% 19.5% 16.9% 18.0% 20% 14.4% 16.3% 10% 2.44 2.52 2.00 2.64 3.00 2.08 2.00 2.08 1.60 2.25 0% ATN…
  13. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 13
    Risk Management Significant percentage of expected natural gas production thru 2011 is hedged via a combination of swaps, collars and puts as follows (/Mcf): 2009 2010 2011 % Hedged 91% 66% 49% Swaps 60%/11.21 54%/10.85 49%/9.30…
  14. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 14
    Long-Term Natural Gas Hedges Upside Potential Hedged Price (/Mcf) 9.23 -11.07 9.84-11.44 Percent of Volume Hedged 60% 17% 14% 54% 12% 49% 2009 2010 2011 Hedged Volumes (MMBtu) Average Daily 2009 2010 2011 15 Note:…
  15. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 15
    Long-Term Oil Hedges 100-127 Hedged Price (WTI/Bbl) Percent of Volume Hedged 64% 13% 63% 63% 64% 2009 2010 2011 2012 Hedged Volumes (Bbl) Average Daily 2009 2010 2011 2012 16
  16. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 16
    Cash Distribution Coverage 2009 2010 Natural Gas Prices (/Mmbtu) Natural Gas Prices (/Mmbtu) 5.00 6.00 7.00 8.00 9.00 5.00 6.00 7.00 8.00 9.00 45.00 1.24x 1.25x 1.26x 1.31x 1.39x 45.00 .92x .99x 1.06x 1.13x 1.22x Crude Oil…
  17. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 17
    Debt Summary ( in millions) Facility Size 400 Borrowing Base 175 (a) Amount Outstanding 135 Borrowing Availability 40 Maturity Date March 2011 Interest Rate Pricing Grid (a): Borrowing Base Utilization of: less than 33% L + 150 bps…
  18. WACHOVIA PIPELINE AND ENERGY MLP SYMPOSIUM – Vanguard Natural Resources, Llc – slide 18
    Vanguard Investment Highlights High quality, long lived reserves with stable production profile Recent acquisitions in the Permian Basin and South Texas balance the commodity and geographic mix and support 18% distribution…

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