Jefferies Conference November 28, 2012 Houston, TX Presented by: Richard Robert, EVP & CFO NYSE: VNR
Overview of Vanguard Natural Resources Upstream oil & gas LLC, headquartered in Houston, Texas Initial Public Offering VNR October 2007 (Total Enterprise Value of 240mm) Seventeen strategic acquisitions totaling 2.5bn expanded…
Our Successful Execution of the E&P MLP Strategy Geographically diverse portfolio of long life assets, well positioned in most of the mature US Basins High Quality, Low 189 MMBoe total proved reserves, 72% proved developed and 15 year…
Geographically Diversified Reserve Base Core Areas Overview Big Horn Basin Williston Basin Proved Reserves: 24.2 MMBoe Proved Reserves: 5.3 MMBoe 189 MMBoe proved reserves 85% oil and 96% Proved 61% gas and 72% proved developed…
How We Spend Capital Disciplined approach to capital spending focus on maintaining cash flow from mature, long lived fields By contrast, resource players invest in growth to support equity valuation The nature of our capital program…
Our Acquisition Strategy The U.S. has a large inventory of mature oil and natural gas basins which provide significant opportunity for future growth and consolidation Current E&P opportunity set is comprised of an estimated 1.5…
Our Successful Acquisition Track Record 8 1,200 1021 3 1,000 deals 783 800 liquids 2 gas 600 494 400 2 2 127 200 106 - 2008 2009 2010 2011 2012* * 2012 includes the recently announced natural gas and liquids…
Arkoma Basin Acquisition Woodford Shale Fayetteville Shale Operated Acreage Non-operated Acreage Assets located in the Woodford Shale and Fayetteville Shale plays Total proved reserves of 402 Bcfe (57% PDP) Current net…
Barrett Acquisition in Colorado and Wyoming Wind River & Powder River, WY and Piceance Basin, CO Assets located in the Piceance Basin in Colorado and the Powder River and Wind River Basins in Wyoming Total proved reserves of 300…
Experienced Management Team Years of Name Title Prior Affiliations Experience Ensource Energy Scott W. Smith President and CEO The Wiser Oil Company 32 San Juan Partners Enbridge USA Richard A. Robert EVP and CFO Midcoast…
Disciplined Financial Strategy Maintain conservative capital structure and sufficient liquidity Availability under Revolver as of 11/1/2012 of 557 million Target Debt / EBITDA of less than 3.0x Active management of debt levels by…
Hedging Philosophy Hedge commodity prices on estimated production from acquisitions for three to five years upon signing the Purchase and Sale Agreement to protect rate of return from price fluctuations Opportunistic hedging program…
Locking in Margins Provides Stability Through the use of hedging, Vanguard is able to lock in significant acquisition margins for the foreseeable future, helping to insure distribution stability 98.49 100.00 92.82 92.27 93.42…
Hedges Mitigate Commodity Price Risk Approximately 90% of expected crude oil proved production hedged thru 2014 at a weighted average FLOOR price of 91.32 per barrel Use a combination of swaps, collars and three-way collars…
Hedges Mitigate Commodity Price Risk Over 80% of expected natural gas proved production hedged thru the first half of 2017 at a weighted average floor price of 4.73 per MMBtu Primarily use NYMEX and basis swaps 50,000 4.60…
Price Performance Since 2009 The results have been great. VNR has outperformed US Royalty Trusts, C-Corps and other E&P MLPs. The strategy works. 500% 400% 374.2% 300% Price Performance (%) 200% 173.4% 124.7% 100%…
Vanguards Value Proposition Vanguard has the highest distribution growth rate since its IPO in October 2007 However, Vanguard is still trading at a higher yield than many of its peers Typically, MLPs with a track record of…
Key Investment Highlights High quality, long-lived reserve base with low production decline rates and low capital reinvestment requirements Geographically diverse asset base comprised predominantly of oil properties Active…
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