Wells Fargo Conference Scott W. Smith, President & CEO Richard Robert, EVP & CFO December 9, 2014
Overview of Vanguard Natural Resources Upstream oil & gas LLC, headquartered in Houston, TX; Initial Public Offering VNR October 2007 had a Total Enterprise Value of Asset Profile(1) 240mm Twenty three strategic…
Geographically Diversified Reserve Base Core Areas Overview Big Horn Basin Powder River Basin 2.3 Tcfe (390 MMBoe) proved reserves Proved Reserves: 127 Bcfe Proved Reserves: 21 Bcfe 68% gas and 32% liquids 85% oil and 96% Proved…
Experienced Management Team Years of Name Title Prior Affiliations Experience Ensource Energy Scott W. Smith President and CEO The Wiser Oil Company 33 San Juan Partners Enbridge USA Richard A. Robert EVP and CFO Midcoast…
Our Focused Goals Today and Into 2015 1) Ensure Distribution Coverage- Improve investors confidence in our ability to continue proven track record of maintaining current monthly cash distribution Focused on achieving adequate rates of…
Acquisitions Are Still Possible Although yields are higher and thus equity cost of capital has gone up, Upstream MLPs are still able to be opportunistic and make accretive acquisitions due to relative weakness across the energy space…
Our Successful Acquisition Track Record Strong record of evaluating and integrating assets, completing over 4.2 billion since VNRs IPO in 2007 Designated business development and acquisition evaluation team We review between 125-150…
An Evolving Reserve Base Acquisitions were driver of increased natural 68% gas exposure since 2011 Natural gas assets are being sold for a better value than oil opportunities 34% 68% of estimated Q3 2014 proved reserves are…
Natural Gas Production Growth Despite lower natural gas prices, production in the Northeast will continue to grow, driving total US production growth year over year resulting in significant negative pricing differentials to Henry…
Pinedale-Jonah Acquisition Pinedale and Jonah Fields in Green River Basin Wyoming Pinedale Jonah Natural gas and oil assets located in the Pinedale and Jonah Fields of Southwestern Wyoming in the Green River Basin Estimated…
Pinedale Well Economic Sensitivities Pinedale well economics are strong and based on recent Ultra results and natural gas prices can achieve rates of return in excess of 45% EUR (Bcfe) 4.0 5.0 6.0 7.0 Well Cost (/MM) 4.0…
Pinedale-Jonah Gas Flow Pinedale Jonah 13
Hunt Gulf Coast Acquisition Cotton Valley and East Haynesville Fields in North Louisiana and East Texas Current Net Natural Gas Oil NGL Total % Proved Production COUNTY FIELD (Bcf) (MMBI) (MMBI) (Bcfe) Developed (MMcfe/d) Cotton…
Piceance Acquisition Oil (MMBbl) Gas (Bcf) NGL (MMBbl) Total (Bcfe) Pinedale PDP 1.7 221.2 9.3 287.2 Jonah PDNP 0.2 15.2 0.6 20.0 PUD 0.6 62.0 2.6 81.4 TOTAL 2.5 298.4 12.5 388.5 Natural gas, oil, and natural gas liquids…
Future Shale Development Requires Massive Capital Average of 70 billion per year in capital requirements for the next 30 years Creates opportunities for E&P MLPs to acquire higher PDP assets as Shale players try to close the funding…
Summary Operating Performance (4) (1) Proved reserves as of 12/31/2013 based on SEC reserve report. (2) Amounts illustrated reflect ENP and VNR proved reserves and production on a consolidated basis. Pro forma for exchange of…
Locking in Margins Provides Stability Through the use of hedging, Vanguard is able to lock in significant acquisition margins for the foreseeable future, helping to insure distribution stability 98.49 100.00 92.82 92.27 93.42…
Hedges Mitigate Commodity Price Risk Note: Hedge prices reflect a weighted average of swap prices, floor prices on collars and long out prices on three way collars. Weighted average floor prices includes impact from the range bonus…
VNR Operating Costs vs Peers VNR operating costs (% of total revenue) is significantly lower than other E&P MLP peers which equates to higher CASH margins 30.0% 28.6% 10.0% 25.6% 26.5% 8.6% 24.4% 24.7% 7.9% 7.8% 25.0% 22.3% 8.0%…
Current Yields Are Abnormally High Current yields are significantly above the historical median of 9.0%, representing the highest level seen over the past four years 30% Current Yield: 16.9% 25% Historical Median: 9.4%…
Higher Yield / Less Growth vs Lower Yield / More Growth Wanted to look at the comparison of two types of MLPs and how long does it take for the distributions both on a quarterly and cumulative basis become equal with a 1,000…
Our Focused Goals Today and Into 2015 1) Ensure Distribution Coverage- Improve investors confidence in our ability to continue proven track record of maintaining current monthly cash distribution Focused on achieving adequate rates of…
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