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PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc

Vanguard Natural Resources, Llc · Jan 6, 2010 · 18 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. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 1
    January 6, 2010 Pritchard Capital Energize 2010 Conference San Francisco, CA
  2. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – 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…
  3. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 3
    Company Profile Company Profile EQUITY MARKET CAP (1) 415 million TOTAL DEBT 130 million LESS CASH 1 million ENTERPRISE VALUE 544 million (1) Market pricing as of December 31, 2009; includes 420m Class B units Positive Cash…
  4. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 4
    Multiple Operating Areas Appalachia Proved Reserves: 53.2 Bcfe(1) 96% Gas, 69% PDP 10.3 MMcfe/d current net production Permian Basin (pro forma) Proved Reserves: 6.7 MMboe (1) 85% oil and 73% PDP 1.5 MBoed current net…
  5. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 5
    2009 - Growth in South Texas 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 year)…
  6. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – 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. Increased net oil production from the Permian by more than 100% High margin assets with inventory of PUD…
  7. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 7
    Growth and Diversification 12/31/07*: OIL, GAS AND NGL 9/30/09**: OIL, GAS AND NGL 1.5 , 2% 19.9 , 14% GAS, BCF GAS, BCF 37.5 , 25% OIL, BCFE OIL, BCFE 90.7 , 61% NGL, BCFE 65.3 , 98% 12/31/07*: BCFE BY AREA 9/30/09**:…
  8. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 8
    Acquisitions Drive Reserve Growth 160 148 140 134 120 109 Reserves, Bcfe 100 80 67 60 40 20 0 12/31/07* 12/31/08* 6/30/09** 9/30/09*** * Netherland, Sewell & Associates reserve report ** Internal reserve report…
  9. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – 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. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 10
    FINANCIAL OVERVIEW 11
  11. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 11
    Hedges Mitigate Distribution Risk Significant percentage 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. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 12
    Hedged Cash Flow=Stable Distribution Coverage 2009 Natural Gas Prices (/MMbtu) 3.00 4.00 5.00 6.00 7.00 2009 Crude Oil Prices WTI 30.00 1.80x 1.74x 1.68x 1.62x 1.56x 40.00 1.81x 1.75x 1.70x 1.64x 1.58x (/Barrel) 50.00 1.83x…
  13. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 13
    14 (75.0%) (50.0%) (25.0%) 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% 150.0% 175.0% 200.0% 225.0% 250.0% 275.0% 300.0% VNR 274.1% MWE 266.8% SGLP 248.8% CQP 248.0% DPM 214.6% NGLS 213.7% RGNC 160.2% 156.9% Note:…
  14. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 14
    Comparable Company Distribution Yields CURRENT DISTRIBUTION YIELDS OF PEER GROUP 2.00 2.00 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…
  15. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 15
    Comparable Trade Volumes of Peer Group AVERAGE (3 Months) TRADING VOLUMES 3-months ending 12/31/09 Source: Thomson One 16
  16. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 16
    Yield Compression Continues 50% Average Yield 2004 2005 2006 2007 2008 2009 Current Liquids T&S 6.5% 6.2% 6.8% 6.1% 8.3% 8.2% 7.0% Natural Gas T&S 6.8 6.4 6.7 6.1 7.8 8.1 7.0 Natural Gas G&P 6.8 5.9 6.2 5.5 12.1 12.4 8.3 40%…
  17. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 17
    Conservative Balance Sheet ( in millions) June 30, 2009 Current (1) Facility Size 400 400 Borrowing Base 154 195 Amount Outstanding 133 130 Borrowing Availability 22 65 Maturity Date March 31, 2011 October 1, 2012 Interest Rate…
  18. PRITCHARD CAPITAL ENERGIZE 2010 CONFERENCE – Vanguard Natural Resources, Llc – slide 18
    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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