RBC Capital Markets Presentation October 7, 2009 Dallas, Texas
Overview of Vanguard Natural Resources Upstream Energy LLC, headquartered in Houston Initial Public Offering VNR NYSE Arca October 2007 Moved to NYSE Big Board in May 2009 Three strategic acquisitions totaling 180MM expanded…
Company Profile Company Profile EQUITY MARKET CAP (1) 250 million TOTAL DEBT 129 million LESS CASH 4 million ENTERPRISE VALUE 375 million (1)Market data as of October 2, 2009; reflects 3.9mm equity offering (including shoe) closed…
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 unit holders a voice…
Appalachian Asset Profile High degree of step out development success Targeting low-risk, multiple Brushy Branch Lewis Heirs Smepa producing horizons Premium pricing due to proximity to northeastern markets: Gausdale 0.23/MMbtu…
Permian Basin Asset Profile Acquisition of producing assets from Apache, closed January 2008 Established Permian Basin as an operating area, approx. 50 operated wells in 7 fields Assumed hedges covering 90% of PDP production…
South Texas Dos Hermanos Acquisition Acquisition from Lewis Energy, closed July 2008, 53.4 million (60/40 cash and stock transaction) Lewis to operate and conduct PUD drilling program through 2013 (6-8 wells per year) Assumed…
South Texas Sun TSH Acquisition Acquisition from Lewis Energy, closed August, 2009 for 52.3 million, all cash funded with proceeds of equity offering Lewis to operate and conduct PUD drilling program through 2015 (7 wells per…
Vanguard Reserve Profile BY RESERVE CATEGORY: BY OIL, GAS AND NGL: 20.7 , 38.1 , 15% 28% PDP GAS, BCF 22.2 , PDNP 17% OIL, BCFE 92.5 , PUD 91.0 , NGL, BCFE 3.3 , 3% 69% 68% BY AREA: Appalachia 57.5 , 43% 54.9 , 41%…
Advantages of Vanguards LLC Structure LLC Partnership structure results in lower cost of capital No entity level income tax Tax Shield minimum 60% of distributions through 2011 will be tax deferred (2007 & 2008 -100%) Unit holders…
FINANCIAL OVERVIEW 14
Risk Management Significant percentage of expected natural gas production (total proved) through 2011 is hedged via a combination of swaps, collars and puts at a weighted average floor price of 8.18 per MMBtu: 2009 2010 2011 %…
2009 Calendar Year Guidance Pre Acquisition (1) Post Acquisition (1) TOTAL PRODUCTION (MMCFE) 6,442 - 6,785 6,785 7,100 AVERAGE DAILY PRODUCTION MCFE/D 17,650 - 18,590 18,815 19,845 LEASE OPERATING EXPENSES (000S) 10,500 - 11,000…
Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 14% 12.8% 12.9% 12.9% 12.9% 12% 11.4% 9.3% 9.7% 10% 8% 6% 4% 2% 2.00 2.52 3.01 2.08 2.05 2.00 0% CRT PSE LINE EVEP LGCY ENP VNR *CRT…
MLP Yields by Subsector 50% Average Yield 2004 2005 2006 2007 2008 Current Liquids T&S 6.5% 6.2% 6.8% 6.1% 8.3% 8.0% Natural Gas T&S 6.8 6.4 6.7 6.1 7.8 7.9 Natural Gas G&P 6.8 5.9 6.2 5.5 12.1 10.8 Propane 8.3 8.1 8.2 7.5 9.8 9.1…
Existing Debt Summary ( in millions) June 30, 2009 Amended Facility Size 400 400 Borrowing Base 154 175 Amount Outstanding 132.5 129 Borrowing Availability 21.5 46 Maturity Date March 31, 2011 October 1, 2012 Interest Rate…
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…
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 unit holders a voice…
Loading...
