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NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc

Vanguard Natural Resources, Llc · May 13, 2010 · 21 slides

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Slides

  1. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 1
    May 13, 2010 NAPTP - MLP Investor Conference Greenwich, Connecticut
  2. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 2
    Overview of Vanguard Natural Resources Upstream Energy LLC, headquartered in Houston Initial Public Offering VNR - October 2007 Four strategic acquisitions totaling 235MM expanded geographic profile and commodity diversity Increased…
  3. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 3
    Company Profile Company Profile EQUITY MARKET CAP (1) 414 million TOTAL DEBT 131 million LESS CASH 1 million ENTERPRISE VALUE 544 million (1) Market pricing as of May 6, 2010; includes 420m Class B units Positive Cash…
  4. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 4
    Multiple Operating Areas Appalachia Proved Reserves: 50.3 Bcfe(1) 94% Gas, 66% PDP 9.8 MMcfe/d current net production Permian Basin Proved Reserves: 6.8 MMboe (1) 88% oil and 67% PDP 1.4 Mboe/d current net production South…
  5. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 5
    2009 - Growth in South Texas Acquisition from Lewis Energy, closed August 2009 for 52.3 million, cash funded with proceeds of equity offering Lewis to operate and conduct PUD drilling program through 2015 (7 wells per year)…
  6. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 6
    2009 - Growth in Permian Basin Acquisition of producing assets in Ward County closed December 2009 for 55 million cash funded with equity proceeds Increased net oil production from the Permian by more than 100% High margin…
  7. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 7
    May 2010 Pending Property Acquisition Acquisition of primarily oil producing assets in Mississippi, Texas and New Mexico announced May 3, 2010 Estimated reserves of 4.7MMBOE, 96% oil, 61% proved developed Estimated net production…
  8. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 8
    Growth and Diversification 12/31/07*: OIL, GAS AND NGL 12/31/09**: OIL, GAS AND NGL 1.5 , 2% 21.3 , 15% GAS, BCF GAS, BCF 38.5 , 27% OIL, BCFE OIL, BCFE 83.1 , 58% NGL, BCFE 65.3 , 98% 12/31/07*: BCFE BY AREA…
  9. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 9
    Acquisitions Drive Reserve Growth Reserves (Bcfe) * 160 143 140 120 109 100 80 67 60 40 20 0 12/31/2007 12/31/2008 12/31/2009 * Based on outside engineers reserve report 10
  10. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 10
    Advantages of Vanguards LLC Structure LLC Partnership structure results in lower cost of capital No entity level income tax is competitive advantage in A&D market No Incentive Distribution Rights (IDRs) Investors share equally in…
  11. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 11
    FINANCIAL OVERVIEW 12
  12. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 12
    Hedges Mitigate Distribution Risk Approximately 83% of expected natural gas production (total proved) through 2011 is hedged via a combination of swaps and collars at a weighted average floor price of 8.07 per MMBtu: 2010 2011 %…
  13. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 13
    Hedged Cash Flow=Stable Distribution Coverage 2010 Natural Gas Prices (/MMBtu) 2.00 3.00 4.00 5.00 6.00 2010 Crude Oil Prices WTI 50.00 1.34x 1.31x 1.29x 1.27x 1.24x 60.00 1.38x 1.35x 1.33x 1.31x 1.28x (/Barrel) 70.00 1.42x…
  14. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 14
    2010 Calendar Year Guidance 2010 Guidance (1) 2009 Actual TOTAL PRODUCTION (MMcfe) 9,074 - 9,574 7,304 AVERAGE DAILY PRODUCTION Mcfe/d 24,860 - 26,230 20,010 LEASE OPERATING EXPENSES (000S) 13,775 - 14,500 12,652 G&A (000S)…
  15. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 15
    Yield Compression Continues Average Yield 2004 2005 2006 2007 2008 2009 YTD Current Liquids T&S 6.5% 6.2% 6.8% 6.1% 8.3% 8.2% 6.7% 6.9% Natural Gas T&S 6.8 6.4 6.7 6.1 7.8 8.1 6.8 7.0 Natural Gas G&P 6.8 5.9 6.2 5.5 12.1 12.4 7.9…
  16. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 16
    17 (100.0%) (50.0%) 0.0% 50.0% 100.0% 150.0% 200.0% XTEX 194.6% APL 185.8% CQP 156.7% NGLS 131.9% BBEP 113.0% WPZ 112.8% MWE 98.9% Note: Market data as of 05/05/2010. VNR 93.8% EROC 86.7% DPM 83.3% NMM 80.8%…
  17. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 17
    Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 14% 11.6% 12% 10.3% 10.6% 9.5% 10.2% 10% 8.9% 9.2% 8% 6% 4% 2% 2.00 2.10 2.08 3.02 2.52 2.00 0% *CRT PSE VNR LGCY EVEP LINE ENP *CRT…
  18. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 18
    Profitable Growth Through Accretive Acquisitions 2.10** 2.00 1.82 1.70* 135 130 115 Adjusted EBITDA Debt 73.0 56.2 48.8 37 30.4 12/31/2007 12/31/2008 12/31/2009 12/31/2010(E) *Annualized quarterly distributions…
  19. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 19
    Conservative Balance Sheet ( in millions) June 30, 2009 Current (1) Facility Size 400 400 Borrowing Base 154 195 Amount Outstanding 133 131 Borrowing Availability 22 64 Maturity Date March 31, 2011 October 1, 2012 Interest Rate…
  20. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 20
    Major Taxation Points All investors receive a partnership K-1 at the end of the year K-1 allocates the partnerships income and expenses to individual investors based on their percentage ownership of the partnership Quarterly…
  21. NAPTP MLP INVESTOR CONFERENCE – Vanguard Natural Resources, Llc – slide 21
    Key Investor Considerations High quality, long lived reserves Asset base generates stable cash flow Multi-year hedge program mitigates commodity risk Geographic and commodity diversity LLC structure gives unitholders a voice…

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