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IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc

Vanguard Natural Resources, Llc · Apr 13, 2010 · 20 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. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 1
    April 13, 2010 IPAA OGIS New York City
  2. IPAA OGIS NEW YORK CITY – 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. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 3
    Company Profile Company Profile EQUITY MARKET CAP (1) 470 million TOTAL DEBT 131 million LESS CASH 1 million ENTERPRISE VALUE 600 million (1) Market pricing as of April 8, 2010; includes 420m Class B units Positive Cash…
  4. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 4
    Multiple Operating Areas Appalachia Proved Reserves: 50.3 Bcfe(1) 94% Gas, 66% PDP 10.0 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…
  5. IPAA OGIS NEW YORK CITY – 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. IPAA OGIS NEW YORK CITY – 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. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 7
    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…
  8. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 8
    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 9
  9. IPAA OGIS NEW YORK CITY – 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 is competitive advantage in A&D market No Incentive Distribution Rights (IDRs) Investors share equally in…
  10. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 10
    FINANCIAL OVERVIEW 11
  11. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 11
    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 %…
  12. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 12
    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…
  13. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 13
    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)…
  14. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 14
    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% 6.8% 6.5% Natural Gas T&S 6.8 6.4 6.7 6.1 7.8 8.1 6.9 6.6 50% Natural Gas G&P 6.8 5.9 6.2 5.5 12.1 12.4…
  15. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 15
    16 (100.0%) (50.0%) 0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% XTEX 448.6% WPZ 233.3% APL 211.3% NGLS 200.5% CQP 174.7% MWE 160.0% VNR 136.8% Note: Market data as of 04/08/2010. DPM 121.6% CLMT 120.3% NMM…
  16. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 16
    Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 2.00 2.10 3.02 2.52 2.08 2.15 *CRT Average Yield of Canadian Royalty Trusts (BTE, ERF, PGH, PWE, PVX) Yield calculated using the closing unit…
  17. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 17
    Comparable Trade Volumes of Peer Group AVERAGE (3 Months) TRADING VOLUMES 1,800,000 1,542,068 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 296,938 318,347 400,000 242,875 78,332 172,905 200,000 0 PSE ENP VNR…
  18. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 18
    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…
  19. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 19
    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…
  20. IPAA OGIS NEW YORK CITY – Vanguard Natural Resources, Llc – slide 20
    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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