Vanguard Natural Resources, Inc. Emergence Presentation November 9, 2017
Executive Summary 3
Vanguard Natural Resources, Inc. Post-Emergence Vanguard has the Capability to Capture Substantial Upside in Core Growth Assets Key Highlights Asset Map & Highlights VNRR successfully completed its financial restructuring on August 1,…
Vanguard Asset Detail (1) Q317 Net PD Proved PD Proved Gas (1) Production Reserves Reserves PV-10 PV-10 Region Net Acres (%) (MMcfe/d) (Bcfe) (Bcfe) (MM) (2) (MM) (2) Operator Arkoma Basin 68,196 95% 29 111 808 61 90 Mixed Core…
Strong Base of Proved Reserves With Substantial Incremental Resource Potential from Core Growth Assets Key Highlights Proved Reserves Proved PV-10 (MM) Proved PV-10 of 1,397 MM As of Oil Gas NGLs Total assuming 50.00 / Bbl and 3.00 /…
Overview of Core Growth Assets I Pinedale II Arkoma Highly delineated position with Position in the core of the substantial inventory of low cost Arkoma Basin, offset to strong Hughes and high return well locations Sublette well…
Substantial Opportunity for Upside in Core Growth Assets I Pinedale II Arkoma Significant Upside from Emerging Horizontal Development Step-Change in Performance Due to Larger Completions Ultra Petroleums 3-well test program is…
Significant Upside for Core Growth Assets Substantial Inventory of High Return Undeveloped Locations Vanguard has identified 3,800 gross (1,200 net) undeveloped locations across its four core growth areas Additional upside through…
Long-Life, Shallow Decline PD Reserves Key Highlights PD Production Decline (%) (1) Vanguards annual production decline rate is among the lowest of its peers 12% 11% On average, Vanguards existing 10% 9% Average PD Decline Per Year…
Best in Class Operating Costs Operating Expenses per Unit of Production (Mcfe) (1)(2) Vanguards focus on efficiency has resulted in a very low cost structure compared to that of its peers Low cost structure underpins cash flow and…
Pro Forma Capital Structure Enhances Flexibility Key Highlights Vanguard Pro Forma Capitalization (MM) Reduced total debt by 825 Petition Date Adjustments 9/30/17 MM and annual cash interest by Cash & Cash Equivalents 30 (13) 17 more…
Initial Asset Sales First Steps to De-Levering & Focusing Vanguards Portfolio Key Highlights Divestiture Candidates The Company has engaged Jefferies as lead advisor and has initiated a process to explore and Williston Basin evaluate…
Commodity Hedge Portfolio Well Hedged to Limit Commodity Volatility through 2020 Natural Gas Positions Oil Positions 225,000 10,000 200,000 8,901 200,000 192,444 9,000 8,381 175,000 8,000 155,244 6,668 144,037 7,000 150,000…
Highly Experienced Management Team Name Position Prior Experience Years in Industry Scott W. Smith President & CEO San Juan Partners 34+ Scott Sloan EVP & CFO 27+ Greenhill Britt Pence EVP & COO Petroleum 30+ Mark Carnes…
Vanguard Highlights 1 Core growth assets provide material economic development inventory 2 Utilization of next-generation completion designs provides significant upside 3 Long-life and shallow decline production base delivers free…
Pinedale Overview 17
Pinedale Asset Overview Predictable Growth from Vertical Well Development with Downspacing & Horizontal Upside Potential Key Highlights Pinedale Asset Map 14,098 net acres in the Pinedale and Jonah fields with 15% WI - 70% operated by…
Highly Delineated Asset with Significant Remaining Upside Key Highlights Identified 10-Acre Producing Vertical Wells Currently 2,800 producing wells Vertical Well Drilling Inventory across Vanguards position in the Pinedale and…
High Quality Operators Focused on the Assets Key Highlights Accelerating Rig Activity Vanguards position is largely operated Ultra 165% Increase Since Q1 2016 by Ultra Petroleum and Pinedale Energy Pinedale Energy / QEP 8 Partners…
Attractive, Low-Risk Rates of Return Across the Play Pinedale Wells are Low-Risk and Repeatable Vanguard has interests in over 2,800 producing wells across the basin that have delineated the type curve and produced consistent results…
Significant Upside Through Emerging Horizontal Development Ultra Petroleum Horizontal Program Update (1) Primary Key Highlights Vanguard Pinedale Type Log (Ultra 3C1 11D) Upside Ultra Petroleum has initiated a 3-well horizontal…
Arkoma Overview 23
Arkoma Asset Overview Large Acreage Position Benefitting from Renewed Industry Activity & Modern Completion Techniques Key Highlights Arkoma Asset Map 68,196 net acres in Hughes, Pittsburg, Coal, and Atoka Counties - 37,400 net acres…
Recent Well Results Highlight Arkoma Basin Strength Arkoma Basin Well Results 1 30 29 28 27 26 25 24 Bravo BP Newfield BP Newfield Trinity Trinity Trinity COLTON 1-27 HUNT-GARRETT 5-343H ELLIS 2H-34XX SMALLEY 4-12H PAYDEN 1H-12XX…
VNRR Study: Modern Completions Leading to Increased EUR Key Highlights Recently completed wells in the Arkoma have demonstrated a similar trend to the SCOOP / STACK, where fluid loading has had a materially positive impact on well…
VNRR Study: Modern Completions Enabling Superior Economics Potential Key Highlights Parameter High Fluid Optimized Case Operators in the Arkoma Basin have moved quickly to adopt high fluid loading completion designs, with Proppant…
Significant Basin Activity Key Highlights Arkoma Basin Operator Summary Substantial undeveloped inventory consisting of 1,600 gross locations - 50% WI in 400 gross locations Vanguard intends to participate in BP and Newfield…
Piceance Overview 29
Piceance Asset Overview Delineated and Operated Asset with Demonstrated Upside from Larger Completions Key Highlights Piceance Asset Map 14,940 net acres Vanguard - 90% WI on 80% of the acreage position Ursa Resources Colorado…
Improved Performance from Modern Completions Key Highlights Most recently, operators have migrated to large-volume fracs - Analyzing data across the Piceance Valley shows significant increased well performance with higher volume…
Large Volume Fracs Result in Strong Economics Key Highlights Historical EURs of 1.4 Bcfe easily supported by a significant number of wells drilled to date in the Mamm Creek area; Vanguard believes EURs of up to 1.8 Bcfe are achievable…
Significant, Low-Risk Development Inventory Key Highlights Piceance Core Development Fairway Substantial undeveloped inventory consisting of 550 gross locations, nearly 100% HBP and operated by Vanguard Permits ready for 80 wells…
Wamsutter Overview 34
Wamsutter Asset Overview Key Highlights Wamsutter Asset Map 42,671 net acres in Sweetwater and Carbon Counties, Wyoming Majority operated by Vanguard with working interest of 60% Q317 net production of 12 MMcfe/d from 260 producing…
Numerous Attractive Development Targets Key Highlights Spacing Overview Wamsutter Basin Type Log Offset operator DSU filing and permitting activity confirms asset upside Fort Union Position offers 300 of net pay consisting of…
Strong Recent Results in the Area Key Highlights Wamsutter Well Locator Map Significant number of highly attractive 1 Vanguard 7 horizontal wells have been drilled in close Champlin LINN High Point 452 J 9-20H 13-155H proximity to…
Other Developing Assets 38
Permian Basin Overview Key Highlights Permian Basin Asset Map (2) Vanguard retains substantial HBP acreage position in the Permian Basin Evaluation underway to determine value maximizing alternatives Excess infrastructure available…
Permian Basin Overview (Contd) Identified Deep Rights in Core Areas of the Delaware & Midland Basin Eddy & Lea Counties Reeves & Ward Counties Net Acres (1) 1,927 Net Acres (1) 1,666 Target Avalon Target Avalon Horizons Bone Spring…
East Haynesville Overview Key Highlights East Haynesville Asset Map 10,540 net acres with average working interest 90% on average - Undeveloped inventory consisting of Arkansas 55 gross / 41 net vertical well locations - Q317 net…
Big Horn Overview Key Highlights Big Horn Field - Elk Basin Historical Production Major fields in the Big Horn include the Elk Basin Field (Madison water flood and Tensleep flue gas injection) and Gooseberry Field Q3 production…
Stable Production Assets Key Highlights Asset Map & Highlights Significant additional reserves and from stable producing assets Big Horn throughout the U.S. Powder River - Proved Reserves of 522 Bcfe; Proved PV-10 of 513 MM…
New Vanguard Board of Directors Mr. Smith is our President, Chief Executive Officer and Director. In 2011, Mr. Smith also served as the President and CEO of Encore Scott W. Smith Energy Partners LP (NYSE: ENP) until its merger…
New Vanguard Board of Directors (Continued) Mr. Alexander is a Managing Director at Marathon Asset Management, a New York based investment manager, which he joined in March 2005. Mr. Alexander focuses on corporate credit and…
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