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CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc

Vanguard Natural Resources, Llc · Aug 24, 2011 · 20 slides

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Slides

  1. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 1
    Citibank MLP Conference Las Vegas, Nevada August 24, 2011
  2. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 2
    Second Quarter 2011- Update Increased quarterly distribution for the third consecutive quarter to 0.575 per unit Adjusted EBITDA attributable to Vanguard increased 90% to 36.5 million from 19.1 million in the second quarter of 2010…
  3. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 3
    Key Developments On June 22, 2011, pursuant to two Purchase and Sale Agreements, Vanguard and ENP agreed to acquire producing oil and natural gas assets in the Permian Basin of West Texas Vanguard and ENP each agreed to purchase 50%…
  4. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 4
    Overview of Vanguard Natural Resources Upstream oil & gas LLC, headquartered in Houston, Texas Initial Public Offering VNR - October 2007 Seven strategic acquisitions totaling 770MM expanded geographic profile and commodity…
  5. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 5
    ENP Transaction Rationale Largest acquisition to date at 380 million Increased exposure to crude oil for VNR unitholders Significantly increases size and scale, overall operating reach and cash flow stability Improved ability to…
  6. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 6
    VNR & ENP Combined Operating Areas 7
  7. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 7
    Proved Reserves by Area Standalone (1) 28.2 MMBoe Combined (1)(2) 69.3 MMBoe VNR VNR + ENP PERMIAN & BIG HORN GULF COAST 26% 35% PERMIAN & MISS GULF COAST 15% 26% ARK-LA-TEX 2% MISS 6% SOUTH TEXAS WILLISTON 32%…
  8. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 8
    Proved Reserves Standalone (1) 28.2 MMBoe Combined (1)(2) 69.3 MMBoe VNR VNR + ENP NGLs NGLs 15% 8% Gas Oil Oil Gas 55% 47% 38% 37% PUD PUD 34% 19% PDP 62% PDP PNP PNP 77% 4% 4% Substantial Increase in Size and…
  9. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 9
    Snapshot of Strategic Acquisitions Since IPO Acquisition Date Region Deal Proved Reserves/ Key Features Size PDP(1) Apache Feb Permian Basin 73.4M 4.4 MMBoe 83% oil 2008 90% PDP Dos Hermanos Jul South Texas 53.4M 20 Bcfe 98% natural…
  10. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 10
    Accretive Acquisitions Drive Growth Reserves (MMBoe) (1) Production (Boe/d) 75.0 69.3 15,000 12,850 60.0 12,500 45.0 10,000 7,500 30.0 23.8 18.1 5,000 4,723 2,701 3,335 15.0 11.2 1,931 2,500 0.0 (2) 0 (2) 2007 2008 2009…
  11. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 11
    FINANCIAL OVERVIEW 12
  12. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 12
    Hedges Mitigate Distribution Risk Approximately 60% of expected crude oil production (total proved) thru 2014 is hedged via a combination of swaps and collars at a weighted average floor price of 86.46 per barrel Approximately 55% of…
  13. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 13
    Hedged Cash Flow=Stable Distribution Coverage 2011 Natural Gas Prices (/MMBtu) 2.00 3.00 4.00 5.00 6.00 2011 Crude Oil Prices WTI 70.00 1.13x 1.14x 1.15x 1.16x 1.17x 80.00 1.25x 1.26x 1.27x 1.28x 1.29x (/Barrel) 90.00 1.38x…
  14. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 14
    Liquidity ( in millions) All figures shown as of 8/3/11 VNR ENP Facility Size 400 475 Borrowing Base 265 400 Amount Outstanding 216.5 254 Borrowing Availability 48.5 146 Maturity Date October 1, 2012 March 7, 2012 Interest Rate…
  15. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 15
    2011 Calendar Year Guidance VNR 2011 VNR 2010 ENP 2011 ENP 2010 Guidance(1) Actual Guidance(1) Actual AVERAGE DAILY 12,500 to 13,200 4,721 7,930 to 8,350 8,766 PRODUCTION BOE/day (2) BOE/day BOE/day BOE/day LEASE OPERATING 12.85 to…
  16. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 16
    Comparable Company Distribution Increases VNR Leads Peer Group in Overall Distribution Growth 40% 36% 36% 35% Peer 1 30% 27% VNR Peer 2 25% 20% Peer 3 20% Peer 4 15% 10% Peer 5 10% 6% VNR…
  17. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 17
    Consistent Distribution Growth VNR has raised its distribution +36% since IPO equating to 7.54 in cumulative distributions 8.00 7.54 6.96 0.575 7.00 6.39 0.57 Quarterly Distribution 6.00 5.83 0.56 Cumulative Distribution…
  18. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 18
    Price Performance Since 2009 The results have been good. VNR has outperformed US Royalty Trusts, C-Corps and other E&P MLPs. The strategy works. 800% 700% VNR Total Return: 532% 600% 500% VNR: 368% 400% 300% E&P…
  19. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 19
    Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 9.5% 9.5% 9.6% 10% 6.8% 7.0% 8.1% 7.7% 7.7% 8.1% 8.3% 4.8% 5% 3.04 2.04 2.76 2.16 2.30 1.69 1.67 1.88 0% *G&P *Pipe *USRT EVEP PSE LINE LGCY VNR…
  20. CITIBANK MLP CONFERENCE – Vanguard Natural Resources, Llc – slide 20
    Key Investor Considerations Management and unitholders are well aligned High quality, long lived reserves Asset base generates stable cash flow Multi-year hedge program mitigates commodity risk Geographic and commodity…

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