John S. Herolds 17th Annual Pacesetters Energy Conference September 24 , 2008
Overview of Vanguard Natural Resources Growth-oriented upstream LLC headquartered in Houston Initial Public Offering VNR NYSE Arca October 2007 Since IPO have acquired approximately 50 Bcfe (52% natural gas, 48% oil) of long life…
Appalachian Asset Profile High degree of step out development success low risk and targeting multiple producing horizons, 500+ identified PUD/Probable locations Brushy Branch Lewis Heirs Smepa 100 well per year drilling program…
Devonian Shale Potential Development of the Devonian shale through horizontal drilling is taking place NGAS in the southern portion of the VNR 10 wells Initial well Appalachian Basin 375-400 Mcf/d VNR Participation Atlas,…
Permian Basin Asset Profile Acquisition of producing assets Lovington Field West Field from Apache, closed 1/31/08 4.4 Mboe acquired, 84% oil and Robertson N Field Hobbs Field 89% PDP 65% Operated and 35% Non- Operated in terms…
South Texas Assets Acquisition from Lewis Energy, closed July 2008 (60/40 cash and stock transaction) 20 Bcfe of reserves 65% PDP, 98% natural gas 1,150 Btu gas content 3,000 Mcf/d current net production Lewis to operate and…
Advantages of Vanguards LLC Structure Fair governance all unit holders vote (no general partner) No entity level income tax competitive advantage in the acquisition market Tax Shield 2008 distributions have been 100% tax deferred…
Comparable Company Trading Yields Current Distribution Yields of Peer Group 25.0% 19.5% 20.0% 16.4% 14.6% 15.0% 15.0% 14.0% 12.0% 12.1% Yield 11.8% 11.9% 11.5% 10.0% 8.7% 5.0% 0.0% VNR ATN LGCY PSE EROC BBEP…
Performance since IPO 2.50 18% CAGR 2.00 Announced Distributions 2.00 1.78 1.78 1.70 (Annualized /unit) 1.50 1.00 0.50 0.00 At IPO Q1 2008 Q2 2008 Current (1) Yield 8.9% 10.8% 10.6% 14.0% Coverage 1.1x 1.3x…
Risk Management We intend to maintain hedges for 80-95% of our total 3-year forecasted production (currently at 82%) We also have in place interest rate swaps on 45% of our floating rate debt for the next 2.5 years, having locked…
Revised 2008 Calendar Year Guidance Total Production (MMcfe) 5,728 - 6,029 Average Daily Production - Gas (Mcf/d) 11,530 - 12,140 Average Daily Production - Oil (Bbls/d) 694 - 730 Lease Operating Expenses (000s) 9,500 - 9,900…
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 increase…
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