DELAWARE | 001-33756 | 61-1521161 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(b) | Pro Forma Financial Information. |
• | The unaudited pro forma combined statement of operations of the Company for the six months ended June 30, 2014 and year ended December 31, 2013 and the notes thereto are filed as Exhibit 99.1 hereto and are incorporated herein by reference. |
• | The summary pro forma combined oil, natural gas and natural gas liquids reserve data of the Company as of December 31, 2013 is filed as Exhibit 99.2 hereto and incorporated herein by reference. |
(d) | Exhibits. |
EXHIBIT NUMBER | DESCRIPTION | |
Exhibit 99.1 | Unaudited pro forma combined statement of operations of Vanguard Natural Resources, LLC for the six months ended June 30, 2014 and year ended December 31, 2013. | |
Exhibit 99.2 | Summary pro forma combined oil, natural gas and natural gas liquids reserve data of Vanguard Natural Resources, LLC for the year ended December 31, 2013. |
VANGUARD NATURAL RESOURCES, LLC | |||
By: | /s/ Richard A. Robert | ||
Name: | Richard A. Robert | ||
Title: | Executive Vice President and Chief Financial Officer | ||
September 10, 2014 | (Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT NUMBER | DESCRIPTION | |
Exhibit 99.1 | Unaudited pro forma combined statement of operations of Vanguard Natural Resources, LLC for the six months ended June 30, 2014 and year ended December 31, 2013. | |
Exhibit 99.2 | Summary pro forma combined oil, natural gas and natural gas liquids reserve data of Vanguard Natural Resources, LLC for the year ended December 31, 2013. |
Vanguard Historical | Pro forma adjustments Pinedale Acquisition (Note 2) | Vanguard Pro forma | |||||||||
Revenues: | |||||||||||
Oil sales | $ | 142,163 | $ | 2,145 | (a) | $ | 144,308 | ||||
Natural gas sales | 133,348 | 8,533 | (a) | 141,881 | |||||||
NGLs sales | 38,748 | 3,581 | (a) | 42,329 | |||||||
Net losses on commodity derivative contracts | (94,436 | ) | — | (94,436 | ) | ||||||
Total revenues | 219,823 | 14,259 | 234,082 | ||||||||
Costs and expenses: | |||||||||||
Production: | |||||||||||
Lease operating expenses | 64,715 | 4,178 | (b) | 68,893 | |||||||
Production and other taxes | 31,563 | 1,607 | (b) | 33,170 | |||||||
Depreciation, depletion, amortization and accretion | 95,118 | 5,287 | (c) | 100,405 | |||||||
Selling, general and administrative expenses | 15,902 | — | 15,902 | ||||||||
Total costs and expenses | 207,298 | 11,072 | 218,370 | ||||||||
Income from operations | 12,525 | 3,187 | 15,712 | ||||||||
Other income (expense): | |||||||||||
Other income | 131 | — | 131 | ||||||||
Interest expense | (32,808 | ) | (988 | ) | (d) | (33,796 | ) | ||||
Net losses on interest rate derivative contracts | (1,579 | ) | — | (1,579 | ) | ||||||
Gain on acquisition of oil and natural gas properties | 32,114 | (32,114 | ) | (e) | — | ||||||
Total other expense | (2,142 | ) | (33,102 | ) | (35,244 | ) | |||||
Net income (loss) | 10,383 | (29,915 | ) | (19,532 | ) | ||||||
Less: Distributions to Preferred unitholders | (6,558 | ) | — | (6,558 | ) | ||||||
Net income (loss) attributable to Common and Class B unitholders | $ | 3,825 | $ | (29,915 | ) | $ | (26,090 | ) | |||
Net income (loss) per Common and Class B unit: | |||||||||||
Basic & diluted | $ | 0.05 | $ | (0.32 | ) | ||||||
Weighted average units outstanding: | |||||||||||
Common units – basic & diluted | 79,865 | 79,865 | |||||||||
Class B units – basic & diluted | 420 | 420 |
Vanguard Historical | Pro forma adjustments Pinedale Acquisition (Note 2) | Vanguard Pro forma | |||||||||
Revenues: | |||||||||||
Oil sales | $ | 268,922 | $ | 22,384 | (a) | $ | 291,306 | ||||
Natural gas sales | 124,513 | 108,821 | (a) | 233,334 | |||||||
NGLs sales | 49,813 | 31,292 | (a) | 81,105 | |||||||
Net gains on commodity derivative contracts | 11,256 | — | 11,256 | ||||||||
Total revenues | 454,504 | 162,497 | 617,001 | ||||||||
Costs and expenses: | |||||||||||
Production: | |||||||||||
Lease operating expenses | 105,502 | 46,465 | (b) | 151,967 | |||||||
Production and other taxes | 40,430 | 18,925 | (b) | 59,355 | |||||||
Depreciation, depletion, amortization and accretion | 167,535 | 50,398 | (c) | 217,933 | |||||||
Selling, general and administrative expenses | 25,942 | — | 25,942 | ||||||||
Total costs and expenses | 339,409 | 115,788 | 455,197 | ||||||||
Income from operations | 115,095 | 46,709 | 161,804 | ||||||||
Other income (expense): | |||||||||||
Other income | 69 | — | 69 | ||||||||
Interest expense | (61,148 | ) | (10,542 | ) | (d) | (71,690 | ) | ||||
Net losses on interest rate derivative contracts | (96 | ) | — | (96 | ) | ||||||
Net gain on acquisition of oil and natural gas properties | 5,591 | — | 5,591 | ||||||||
Total other expense | (55,584 | ) | (10,542 | ) | (66,126 | ) | |||||
Net income | 59,511 | 36,167 | 95,678 | ||||||||
Less: Distributions to Preferred unitholders | (2,634 | ) | — | (2,634 | ) | ||||||
Net income attributable to Common and Class B unitholders | $ | 56,877 | $ | 36,167 | $ | 93,044 | |||||
Net income per Common and Class B unit: | |||||||||||
Basic | $ | 0.78 | $ | 1.27 | |||||||
Diluted | $ | 0.77 | $ | 1.26 | |||||||
Weighted average units outstanding: | |||||||||||
Common units – basic | 72,644 | 72,644 | |||||||||
Common units – diluted | 72,992 | 72,992 | |||||||||
Class B units – basic & diluted | 420 | 420 |
(in thousands) | |||
Fair value of assets and liabilities acquired: | |||
Oil and natural gas properties | $ | 600,123 | |
Inventory | 244 | ||
Asset retirement obligations | (12,404 | ) | |
Imbalance liabilities | (172 | ) | |
Other | (124 | ) | |
Total fair value of assets and liabilities acquired | 587,667 | ||
Total fair value of consideration transferred | 555,553 | ||
Gain on acquisition | $ | 32,114 |
(a) | Represents the increase in oil, natural gas and natural gas liquids sales resulting from the Pinedale Acquisition. |
(b) | Represents the increase in lease operating expenses and production and other taxes resulting from the Pinedale Acquisition. |
(c) | Represents the increase in depreciation, depletion, amortization and accretion resulting from the Pinedale Acquisition. |
(d) | Represents the pro forma interest expense related to borrowings under the reserve-based credit facility to fund the Pinedale Acquisition. |
(e) | Represents the elimination of the nonrecurring gain from the acquisition of oil, natural gas and natural gas liquids properties in the Pinedale Acquisition. |
Natural Gas (in MMcf) | ||||||||
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | ||||||
Net proved reserves | ||||||||
January 1, 2013 | 546,513 | 605,911 | 1,152,424 | |||||
Revisions of previous estimates | (9,589 | ) | — | (9,589 | ) | |||
Extensions, discoveries and other | 13,556 | — | 13,556 | |||||
Purchases of reserves in place | 86,245 | — | 86,245 | |||||
Production | (50,236 | ) | (32,156 | ) | (82,392 | ) | ||
December 31, 2013 | 586,489 | 573,755 | 1,160,244 |
Oil (in MBbls) | ||||||||
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | ||||||
Net proved reserves | ||||||||
January 1, 2013 | 42,218 | 5,102 | 47,320 | |||||
Revisions of previous estimates | (765 | ) | — | (765 | ) | |||
Extensions, discoveries and other | 303 | — | 303 | |||||
Purchases of reserves in place | 6,649 | — | 6,649 | |||||
Production | (3,089 | ) | (250 | ) | (3,339 | ) | ||
December 31, 2013 | 45,316 | 4,852 | 50,168 |
Natural Gas Liquids (in MBbls) | ||||||||
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | ||||||
Net proved reserves | ||||||||
January 1, 2013 | 18,940 | 21,200 | 40,140 | |||||
Revisions of previous estimates | 4,836 | — | 4,836 | |||||
Extensions, discoveries and other | 343 | — | 343 | |||||
Purchases of reserves in place | 6,553 | — | 6,553 | |||||
Production | (1,477 | ) | (1,156 | ) | (2,633 | ) | ||
December 31, 2013 | 29,195 | 20,044 | 49,239 |
(a) | Includes Vanguard’s and the Pinedale Acquisition’s estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2013. |
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | |||||||
Estimated proved reserves: | |||||||||
Natural Gas (MMcf) | 586,489 | 573,755 | 1,160,244 | ||||||
Oil (MBbls) | 45,316 | 4,852 | 50,168 | ||||||
Natural Gas Liquids (MBbls) | 29,195 | 20,044 | 49,239 | ||||||
MMcfe | 1,033,555 | 723,131 | 1,756,686 | ||||||
Estimated proved developed reserves: | |||||||||
Natural Gas (MMcf) | 455,162 | 274,723 | 729,885 | ||||||
Oil (MBbls) | 40,099 | 2,126 | 42,225 | ||||||
Natural Gas Liquids (MBbls) | 18,962 | 9,586 | 28,548 | ||||||
MMcfe | 809,528 | 344,995 | 1,154,523 |
(a) | Includes Vanguard’s and the Pinedale Acquisition’s estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2013. |
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | ||||||||||
Future cash inflows | $ | 6,670,299 | $ | 2,290,161 | $ | 8,960,460 | ||||||
Future production costs | (2,352,721 | ) | (876,434 | ) | (3,229,155 | ) | ||||||
Future development costs | (358,119 | ) | (333,861 | ) | (691,980 | ) | ||||||
Future net cash flows | 3,959,459 | 1,079,866 | 5,039,325 | |||||||||
10% annual discount for estimated timing of cash flows | (2,125,488 | ) | (619,767 | ) | (2,745,255 | ) | ||||||
Standardized measure of discounted future net cash flows | $ | 1,833,971 | $ | 460,099 | $ | 2,294,070 |
(a) | The pro forma standardized measure includes Vanguard and the Pinedale Acquisition. |
Vanguard historical | Pinedale Acquisition | Vanguard pro forma combined (a) | ||||||||||
Sales and transfers, net of production costs | $ | (297,316 | ) | $ | (97,107 | ) | $ | (394,423 | ) | |||
Net changes in prices and production costs | (13,797 | ) | — | (13,797 | ) | |||||||
Extensions discoveries and improved recovery, less related costs | 24,110 | — | 24,110 | |||||||||
Changes in estimated future development costs | 43,496 | — | 43,496 | |||||||||
Previously estimated development costs incurred during the period | 56,661 | — | 56,661 | |||||||||
Revision of previous quantity estimates | 28,462 | — | 28,462 | |||||||||
Accretion of discount | 157,655 | 50,655 | 208,310 | |||||||||
Purchases of reserves in place | 333,530 | — | 333,530 | |||||||||
Change in production rates, timing and other | (75,377 | ) | — | (75,377 | ) | |||||||
Net change in standardized measure | 257,424 | (46,452 | ) | 210,972 | ||||||||
Standardized measure, January 1, 2013 | 1,576,547 | 506,551 | 2,083,098 | |||||||||
Standardized measure, December 31, 2013 | $ | 1,833,971 | $ | 460,099 | $ | 2,294,070 |
(a) | The pro forma standardized measure includes Vanguard and the Pinedale Acquisition. |