Delaware | 001-33756 | 61-1521161 | ||
(State or Other Jurisdiction | (Commission | (IRS Employer | ||
Of Incorporation) | File Number) | Identification No.) |
Exhibit Number | Description | |
Exhibit 99.1 | Press Release dated May 19, 2016. | |
Exhibit 99.2 | Unaudited pro forma condensed combined consolidated financial information of Vanguard, as adjusted for the SCOOP/STACK Divestiture, as of and for the three months ended March 31, 2016 and as adjusted for the LRE Merger, the Eagle Rock Merger and the SCOOP/STACK Divestiture, for the year ended December 31, 2015. |
VANGUARD NATURAL RESOURCES, LLC | |||
Dated: May 19, 2016 | By: | /s/ Richard A. Robert | |
Name: | Richard A. Robert | ||
Title: | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit Number | Description | |
Exhibit 99.1 | Press Release dated May 19, 2016. | |
Exhibit 99.2 | Unaudited pro forma condensed combined consolidated financial information of Vanguard, as adjusted for the SCOOP/STACK Divestiture, as of and for the three months ended March 31, 2016 and as adjusted for the LRE Merger, the Eagle Rock Merger and the SCOOP/STACK Divestiture, for the year ended December 31, 2015. |
• | 239 MMcfe of 2015 year-end reserves with approximately 56% being natural gas, 13% oil and 31% natural gas liquids (“NGLs”); |
• | Properties consist of more than 20,000 total net acres in the SCOOP/STACK area in Oklahoma; |
• | Current production of approximately 50 MMcfe per day; |
• | Approximately 410 producing wells; |
• | No impact to Vanguard’s overall hedge volume; |
• | Proceeds from the sale immediately used to pay down borrowings under Vanguard’s reserve based credit facility; and |
• | Vanguard's 2016 Spring Borrowing Base Redetermination is scheduled to be completed on May 26, 2016. |
Post SCOOP/STACK Sale Guidance FY 2016E | Midpoint Of Previously Announced Guidance FY 2016E (1) | |||||||||||
Net Production: | ||||||||||||
Oil (Bbls/d) | 12,100 | - | 13,400 | 13,500 | ||||||||
Natural gas (Mcf/d) | 272,000 | - | 300,000 | 295,000 | ||||||||
Natural gas liquids (Bbls/d) | 9,700 | - | 10,700 | 11,400 | ||||||||
Total (Mcfe/d) | 402,800 | 444,600 | 444,400 | |||||||||
Costs: | ||||||||||||
Lease operating expenses | $ | 160,000 | - | $ | 177,000 | $170,750 | ||||||
Production taxes | $ | 37,000 | - | $ | 41,000 | $36,500 | ||||||
G&A expenses (excluding non-cash compensation) | $ | 39,000 | - | $ | 43,000 | $41,000 | ||||||
Depreciation, depletion, amortization and accretion | $ | 160,000 | - | $ | 180,000 | $227,500 | ||||||
Costs per Mcfe: | ||||||||||||
Lease operating expenses | $ | 1.05 | - | $ | 1.15 | $1.05 | ||||||
Production taxes (% of revenue) | 10.0 | % | - | 12.0 | % | 11.5% | ||||||
G&A expenses (excluding non-cash compensation) | $ | 0.24 | - | $ | 0.28 | $0.25 | ||||||
Depreciation, depletion, amortization and accretion | $ | 1.00 | - | $ | 1.20 | $1.40 | ||||||
Cash Flow Calculation (in thousands): | ||||||||||||
Adjusted EBITDA (2) | $370,000 | $360,000 | ||||||||||
Interest expense, including settlements paid on interest rate derivatives | $(104,000) | $(105,000) | ||||||||||
Capital expenditures | $(73,000) | $(63,000) | ||||||||||
Distributions to Preferred Unitholders (3) | $(2,230) | $(2,230) | ||||||||||
Distributable cash flow | $190,770 | $189,770 | ||||||||||
Excess of net cash after distributions to unitholders (4) | $150,000 | $145,000 | ||||||||||
Mid-point adjusted net income per unit (2) | $0.60 | $0.10 | ||||||||||
Units outstanding (millions) | 131.4 | 131.0 | ||||||||||
Assumed NYMEX Pricing (May 13, 2016) (5): | Q1 2016A | Q2 2016E | Q3 2016E | Q4 2016E | ||||||||
Oil ($/Bbl) | $33.23 | $44.45 | $47.37 | $48.51 | ||||||||
Natural gas ($/MMBtu) | $2.10 | $2.01 | $2.22 | $2.48 | ||||||||
Average NYMEX Differentials: | ||||||||||||
Oil ($/Bbl) | $(6.66) | $(7.00) | $(7.00) | $(7.00) | ||||||||
Natural gas ($/MMBtu) | $(0.80) | $(0.85) | $(0.80) | $(0.80) | ||||||||
NGL realization as a percentage of crude oil NYMEX price (6) | 24% | 25% | 25% | 25% | ||||||||
Capital Expenditures Details (in thousands): | Q1 2016A | Q2 2016E | Q3 2016E | Q4 2016E | ||||||||
Operated | $(3,000) | $(8,000) | $(8,000) | $(7,000) | ||||||||
Non-Operated | $(17,000) | $(14,000) | $(10,000) | $(6,000) | ||||||||
Total Capital Expenditures | $(20,000) | $(22,000) | $(18,000) | $(13,000) |
(1) | Previously announced guidance numbers released March 4, 2016. |
(2) | Adjusted EBITDA and adjusted net income exclude the amortization of value on derivative contracts acquired (approximately $16.1 million for the FY 2016). |
(3) | Reflects current monthly preferred distributions which were suspended effective with the February 2016 distribution and would have been paid in April 2016. |
(4) | Excess of net cash after distributions is net of any expected working capital adjustments and cash reserves and does not consider the payment of any accrued preferred distributions. |
(5) | NYMEX pricing includes actual settlements for January, February, March and April 2016, and NYMEX strip pricing on May 13, 2016 thereafter. |
(6) | Assumes a weighted average product breakout of 21% ethane, 35% propane, 11% isobutane, 15% n-butane and 18% pentane. |
Apr-Dec 31 2016 | Year 2017 | ||||||||
Gas Production Hedged: | |||||||||
% Anticipated Production Hedged | 84 | % | 69 | % | |||||
Weighted Average Price ($/MMBtu) | $ | 4.17 | $ | 3.70 | |||||
Oil Production Hedged: | |||||||||
% Anticipated Production Hedged | 89 | % | 23 | % | |||||
Weighted Average Price ($/Bbl) | $ | 66.43 | $ | 84.68 | |||||
NGLs Production Hedged: | |||||||||
% Anticipated Production Hedged | 26 | % | — | ||||||
Weighted Average Price ($/Bbl) | $ | 30.31 | $ | — |
Historical Vanguard | Pro Forma Adjustments (Note 2) | Vanguard/ SCOOP/STACK Divestiture Pro Forma Combined | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Trade accounts receivable, net | $ | 92,253 | $ | (71 | ) | (a) | $ | 92,182 | ||||
Derivative assets | 216,651 | — | 216,651 | |||||||||
Other current assets | 5,458 | (254 | ) | (a) | 5,204 | |||||||
Total current assets | 314,362 | (325 | ) | 314,037 | ||||||||
Oil and natural gas properties, at cost | 4,957,414 | (279,938 | ) | (a) | 4,677,476 | |||||||
Accumulated depletion, amortization and impairment | (3,489,965 | ) | — | (3,489,965 | ) | |||||||
Oil and natural gas properties evaluated, net – full cost method | 1,467,449 | (279,938 | ) | 1,187,511 | ||||||||
Other assets | ||||||||||||
Goodwill | 506,046 | — | 506,046 | |||||||||
Derivative assets | 55,167 | — | 55,167 | |||||||||
Other assets | 40,541 | — | 40,541 | |||||||||
Total assets | $ | 2,383,565 | $ | (280,263 | ) | $ | 2,103,302 | |||||
Liabilities and members’ equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable: | ||||||||||||
Trade | $ | 2,430 | $ | — | $ | 2,430 | ||||||
Affiliates | 1,392 | — | 1,392 | |||||||||
Accrued liabilities: | ||||||||||||
Lease operating | 18,161 | — | 18,161 | |||||||||
Development capital | 14,158 | — | 14,158 | |||||||||
Interest | 18,116 | — | 18,116 | |||||||||
Production and other taxes | 43,568 | — | 43,568 | |||||||||
Other | 4,331 | — | 4,331 | |||||||||
Derivative liabilities | 168 | — | 168 | |||||||||
Oil and natural gas revenue payable | 29,231 | (4,105 | ) | (a) | 25,126 | |||||||
Other current liabilities | 17,206 | — | 17,206 | |||||||||
Total current liabilities | 148,761 | (4,105 | ) | 144,656 | ||||||||
Long-term debt | 2,168,995 | (272,499 | ) | (b) | 1,896,496 | |||||||
Asset retirement obligations, net of current portion | 261,547 | (3,659 | ) | (a) | 257,888 | |||||||
Other long-term liabilities | 39,905 | — | 39,905 | |||||||||
Total liabilities | 2,619,208 | (280,263 | ) | 2,338,945 | ||||||||
Commitments and contingencies | ||||||||||||
Members’ deficit | ||||||||||||
Cumulative Preferred units | 335,444 | — | 335,444 | |||||||||
Common units | (585,949 | ) | — | (585,949 | ) | |||||||
Class B units | 7,615 | — | 7,615 | |||||||||
Total VNR members’ deficit | (242,890 | ) | — | (242,890 | ) | |||||||
Non-controlling interest in subsidiary | 7,247 | — | 7,247 | |||||||||
Total members’ deficit | (235,643 | ) | — | (235,643 | ) | |||||||
Total liabilities and members’ deficit | $ | 2,383,565 | $ | (280,263 | ) | $ | 2,103,302 |
(in thousands, except per unit data) | Historical Vanguard | Pro Forma adjustments (Note 3) | Vanguard/ LRE/Eagle Rock/SCOOP-STACK Divestiture Pro Forma Combined | |||||||||
Revenues: | ||||||||||||
Oil sales | $ | 35,654 | $ | (4,418 | ) | (a) | $ | 31,236 | ||||
Natural gas sales | 36,871 | (4,111 | ) | (a) | 32,760 | |||||||
NGLs sales | 8,915 | (1,631 | ) | (a) | 7,284 | |||||||
Net gains on commodity derivative contracts | 31,759 | — | 31,759 | |||||||||
Total revenues | 113,199 | (10,160 | ) | 103,039 | ||||||||
Costs and expenses: | ||||||||||||
Production: | ||||||||||||
Lease operating expenses | 42,328 | (715 | ) | (b) | 41,613 | |||||||
Production and other taxes | 8,668 | (387 | ) | (b) | 8,281 | |||||||
Depreciation, depletion, amortization, and accretion | 48,053 | (8,268 | ) | (c) | ||||||||
(47 | ) | (c) | 39,738 | |||||||||
Impairment of oil and natural gas properties | 207,764 | — | 207,764 | |||||||||
Selling, general and administrative expenses | 11,021 | — | 11,021 | |||||||||
Total costs and expenses | 317,834 | (9,417 | ) | 308,417 | ||||||||
Loss from operations | (204,635 | ) | (743 | ) | (205,378 | ) | ||||||
Other income (expense): | ||||||||||||
Interest expense | (25,704 | ) | 2,003 | (d) | (23,701 | ) | ||||||
Net losses on interest rate derivative contracts | (4,691 | ) | — | (4,691 | ) | |||||||
Gain on extinguishment of debt | 89,714 | — | 89,714 | |||||||||
Other | 56 | — | 56 | |||||||||
Total other income | 59,375 | 2,003 | 61,378 | |||||||||
Loss from continuing operations | (145,260 | ) | 1,260 | (144,000 | ) | |||||||
Less: Net income attributable to non-controlling interests | (24 | ) | — | (24 | ) | |||||||
Net loss attributable to Vanguard unitholders | (145,284 | ) | 1,260 | (144,024 | ) | |||||||
Distributions to Preferred unitholders | (6,690 | ) | — | (6,690 | ) | |||||||
Loss from continuing operations attributable to Common and Class B unitholders | $ | (151,974 | ) | $ | 1,260 | $ | (150,714 | ) | ||||
Loss from continuing operations per Common and Class B unit | ||||||||||||
Basic and Diluted | $ | (1.16 | ) | $ | (1.15 | ) | ||||||
Weighted average Common units outstanding | ||||||||||||
Common units – basic & diluted | 130,530 | 130,530 | ||||||||||
Class B units – basic & diluted | 420 | 420 |
(in thousands, except per unit data) | Historical Vanguard | Historical LRE | Pro Forma adjustments (Note 3) | Historical Eagle Rock | Pro Forma adjustments (Note 3) | Vanguard/ LRE/Eagle Rock Pro Forma Combined | Pro Forma adjustments (Note 3) | Vanguard/ LRE/Eagle Rock/SCOOP-STACK Divestiture Pro Forma Combined | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Oil sales | $ | 164,111 | $ | 39,568 | $ | — | $ | — | $ | 52,791 | (n) | $ | 256,470 | $ | (31,842 | ) | (a) | $ | 224,628 | |||||||||||||
Natural gas sales | 193,496 | 12,097 | 71 | (e) | — | 25,953 | (n) | 231,761 | (14,641 | ) | (a) | 217,120 | ||||||||||||||||||||
144 | (o) | |||||||||||||||||||||||||||||||
NGLs sales | 39,620 | 3,803 | — | — | 13,632 | (n) | 57,055 | (11,311 | ) | (a) | 45,744 | |||||||||||||||||||||
Natural gas, natural gas liquids, oil, condensate and sulfur | — | — | — | 92,376 | (92,376 | ) | (n) | — | — | — | ||||||||||||||||||||||
Net gains on commodity derivative contracts | 169,416 | 38,948 | — | 50,914 | — | 259,278 | — | 259,278 | ||||||||||||||||||||||||
Other income | 71 | (71 | ) | (e) | 144 | (144 | ) | (o) | — | — | — | |||||||||||||||||||||
Total revenues | 566,643 | 94,487 | — | 143,434 | — | 804,564 | (57,794 | ) | 746,770 | |||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||
Production: | ||||||||||||||||||||||||||||||||
Lease operating expenses | 146,654 | 18,741 | (281 | ) | (g) | 33,590 | — | 198,704 | (10,443 | ) | (b) | 188,261 | ||||||||||||||||||||
Production and other taxes | 40,576 | 4,117 | — | 3,990 | — | 48,683 | (2,154 | ) | (b) | 46,529 | ||||||||||||||||||||||
Depreciation, depletion, amortization, and accretion | 247,119 | 27,589 | (27,589 | ) | (h) | 47,426 | (43,428 | ) | (q) | 293,289 | (33,788 | ) | (c) | 259,274 | ||||||||||||||||||
12,535 | (h) | 28,944 | (q) | (227 | ) | (c) | ||||||||||||||||||||||||||
1,198 | (i) | (505 | ) | (r) | ||||||||||||||||||||||||||||
Impairment of oil and natural gas properties | 1,842,317 | 132,296 | — | 75,313 | — | 2,049,926 | — | 2,049,926 | ||||||||||||||||||||||||
Goodwill impairment loss | 71,425 | — | — | — | — | 71,425 | — | 71,425 | ||||||||||||||||||||||||
Accretion expense | — | 1,556 | (1,556 | ) | (i) | — | — | — | — | — | ||||||||||||||||||||||
Loss on settlement of asset retirement obligations | — | 125 | (125 | ) | (j) | — | — | — | — | — | ||||||||||||||||||||||
Selling, general and administrative expenses | 55,076 | 19,055 | 16 | (f) | 34,047 | (412 | ) | (s) | 107,762 | — | 107,762 | |||||||||||||||||||||
(20 | ) | (k) | ||||||||||||||||||||||||||||||
Total costs and expenses | 2,403,167 | 203,479 | (15,822 | ) | 194,366 | (15,401 | ) | 2,769,789 | (46,612 | ) | 2,723,177 | |||||||||||||||||||||
Income (loss) from operations | (1,836,524 | ) | (108,992 | ) | 15,822 | (50,932 | ) | 15,401 | (1,965,225 | ) | (11,182 | ) | (1,976,407 | ) | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest expense | (87,573 | ) | (9,150 | ) | 9,150 | (l) | (6,477 | ) | 2,337 | (t) | (99,542 | ) | 7,902 | (d) | (91,640 | ) | ||||||||||||||||
(5,329 | ) | (l) | (2,500 | ) | (t) |
Net losses on interest rate derivative contracts | 153 | (2,421 | ) | — | (5,728 | ) | — | (7,996 | ) | — | (7,996 | ) | ||||||||||||||||||||
Net gain on acquisition of oil and natural gas properties | 40,533 | — | — | — | (40,817 | ) | (u) | (284 | ) | — | (284 | ) | ||||||||||||||||||||
Net income (loss) from short term investments | — | — | — | (5,754 | ) | 3,179 | (p) | (2,575 | ) | — | (2,575 | ) | ||||||||||||||||||||
Other | 237 | — | — | 3,207 | (3,179 | ) | (p) | 265 | — | 265 | ||||||||||||||||||||||
Total other income (expense) | (46,650 | ) | (11,571 | ) | 3,821 | (14,752 | ) | (40,980 | ) | (110,132 | ) | 7,902 | (102,230 | ) | ||||||||||||||||||
Income (loss) before taxes | (1,883,174 | ) | (120,563 | ) | 19,643 | (65,684 | ) | (25,579 | ) | (2,075,357 | ) | (3,280 | ) | (2,078,637 | ) | |||||||||||||||||
Income tax benefit (expense) | — | (16 | ) | 16 | (f) | 2,489 | — | 2,489 | — | 2,489 | ||||||||||||||||||||||
Loss from continuing operations | (1,883,174 | ) | (120,579 | ) | 19,659 | (63,195 | ) | (25,579 | ) | (2,072,868 | ) | (3,280 | ) | (2,076,148 | ) | |||||||||||||||||
Distributions to Preferred unitholders | (26,759 | ) | — | — | — | — | (26,759 | ) | — | (26,759 | ) | |||||||||||||||||||||
Loss from continuing operations attributable to Common and Class B unitholders | $ | (1,909,933 | ) | $ | (120,579 | ) | $ | 19,659 | $ | (63,195 | ) | $ | (25,579 | ) | $ | (2,099,627 | ) | $ | (3,280 | ) | $ | (2,102,907 | ) | |||||||||
Loss from continuing operations per Common and Class B unit | ||||||||||||||||||||||||||||||||
Basic and Diluted | $ | (19.80 | ) | $ | (16.15 | ) | $ | (16.18 | ) | |||||||||||||||||||||||
Weighted average Common units outstanding | ||||||||||||||||||||||||||||||||
Common units – basic & diluted | 96,048 | 11,724 | (m) | 21,800 | (v) | 129,572 | 129,572 | |||||||||||||||||||||||||
Class B units – basic & diluted | 420 | 420 | 420 |
(a) | To record the disposition of certain oil and natural gas properties, imbalance receivable, inventory, suspense payable and asset retirement obligation associated with the oil and natural gas properties divested. |
(b) | To record the repayment of outstanding debt under the reserve-based credit facility using the proceeds from the SCOOP/STACK Divestiture. |
(a) | Represents the decrease in oil, natural gas and natural gas liquids sales resulting from the SCOOP/STACK Divestiture. |
(b) | Represents the decrease in lease operating expenses and production and other taxes resulting from the SCOOP/STACK Divestiture. |
(c) | Represents the decrease in depreciation, depletion, amortization and accretion resulting from the SCOOP/STACK Divestiture. |
(d) | Represents the adjustment to interest expense arising from the reduction of the borrowing base under Vanguard’s reserve-based credit facility due to the SCOOP/STACK Divestiture. |
(e) | Represents the reclassification of LRE’s other income sales to conform to Vanguard’s natural gas product sales presentation. |
(f) | Represents the reclassification of LRE’s income tax expense to conform to Vanguard’s presentation. |
(g) | Represents the capitalization of unsuccessful exploration costs, geological and geophysical costs and delay rentals attributable to the development of oil and natural gas properties in accordance with the full cost method of accounting for oil and natural gas properties. |
(h) | Represents the change in depreciation, depletion and amortization primarily resulting from the pro forma calculation of the combined entity’s depletion expense under the full cost method of accounting for oil and natural gas properties. |
(i) | Represents the change in accretion expense using Vanguard’s asset retirement obligations estimates. |
(j) | Represents the adjustment to eliminate the loss on settlement of asset retirement obligations to conform to Vanguard’s full cost method of accounting for oil and natural gas properties. |
(k) | Represents the elimination of certain general and administrative expenses resulting from LRE not being a separate public company after the completion of the LRE Merger, including NYSE listing fees and SEC filing fees. |
(l) | Represents the adjustment to interest expense arising from borrowings under Vanguard’s reserve-based credit facility used to terminate LRE’s credit agreement and term loan agreement and the extinguishment of the related debt outstanding. We eliminated the interest expense recorded by LRE and calculated pro forma interest expense based on the long-term debt assumed of $290.0 million and Vanguard’s variable interest rate as of October 5, 2015 of 2.45%. The effect on net income of a 1/8 percent variance in interest rates would be $0.7 million for the year ended December 31, 2015. |
(m) | Represents the adjustment for the weighted average number of units from the issuance of approximately 15.4 million Vanguard common units under the terms of the LRE Merger, which consists of 15.4 million common units issued to the former LRE unitholders and 12,320 common units issued to the former members of LRE GP, whereby LRE’s |
(n) | Represents the reclassification of Eagle Rock’s natural gas, natural gas liquids, oil, condensate and sulfur revenues to conform to Vanguard’s oil sales, natural gas sales and NGLs sales presentation. |
(o) | Represents the reclassification of Eagle Rock’s other income sales to conform to Vanguard’s natural gas product sales presentation. |
(p) | Represents the reclassification of Eagle Rock’s income on short term investments to conform to Vanguard’s presentation. |
(q) | Represents the change in depreciation, depletion and amortization primarily resulting from the pro forma calculation of the combined entity’s depletion expense under the full cost method of accounting for oil and natural gas properties. |
(r) | Represents the change in accretion expense using Vanguard’s asset retirement obligations estimates. |
(s) | Represents the elimination of certain general and administrative expenses resulting from Eagle Rock not being a separate public company after the completion of the Eagle Rock Merger, including NASDAQ listing fees and SEC filing fees. |
(t) | Represents the adjustment to interest expense arising from borrowings under Vanguard’s reserve-based credit facility used to terminate Eagle Rock’s credit agreement and term loan agreement and the extinguishment of the related debt outstanding. Interest expense recorded by Eagle Rock included interest for its senior notes and revolving credit facility. We eliminated the interest expense recorded by Eagle Rock related to the revolving credit facility only and calculated pro forma interest expense. We applied Vanguard’s monthly variable interest rate, which ranged from 2.18% to 2.45% in 2015, to Eagle Rock’s monthly outstanding balance to calculate the pro forma interest expense adjustment. The effect on net income of a 1/8 percent variance in interest rates would be $0.3 million for the year ended December 31, 2015. |
(u) | Represents the elimination of nonrecurring bargain purchase gain recognized in the Eagle Rock Merger. |
(v) | Represents the adjustment for the weighted average number of units from the issuance of approximately 27.7 million Vanguard common units under the terms of the Eagle Rock Merger, whereby Eagle Rock’s public unitholders received 0.185 Vanguard common units for each Eagle Rock common unit held at closing. Since the combined results of operations after giving effect to the merger and the Eagle Rock merger results in a net loss, 0.16 million Vanguard phantom units were excluded from the calculation of pro forma diluted earnings per unit due to their anti-dilutive effect. |
Natural Gas (in MMcf) | ||||||||||||||
Vanguard Historical | LRE Historical | Eagle Rock Historical | Pro Forma Adjustments(a) | Vanguard/Pro forma Combined | ||||||||||
Net proved reserves | ||||||||||||||
January 1, 2015 | 1,475,867 | 96,725 | 169,093 | — | 1,741,685 | |||||||||
Revisions of previous estimates | (133,234 | ) | (28,318 | ) | 48,542 | — | (113,010 | ) | ||||||
Extensions, discoveries and other | 46,664 | — | — | — | 46,664 | |||||||||
Purchases of reserves | 271,504 | — | — | (271,504 | ) | — | ||||||||
Production | (106,615 | ) | (6,047 | ) | (13,180 | ) | 4,689 | (121,153 | ) | |||||
December 31, 2015 | 1,554,186 | 62,360 | 204,455 | (266,815 | ) | 1,554,186 |
Oil (in MBbls) | ||||||||||||||
Vanguard Historical | LRE Historical | Eagle Rock Historical | Pro Forma Adjustments(a) | Vanguard/Pro forma Combined | ||||||||||
Net proved reserves | ||||||||||||||
January 1, 2015 | 50,049 | 13,106 | 11,017 | — | 74,172 | |||||||||
Revisions of previous estimates | (4,208 | ) | (4,205 | ) | 3,841 | — | (4,572 | ) | ||||||
Extensions, discoveries and other | 640 | — | — | — | 640 | |||||||||
Purchases of reserves | 21,826 | — | — | (21,826 | ) | — | ||||||||
Sales of reserves in place | (225 | ) | — | — | — | (225 | ) | |||||||
Production | (4,008 | ) | (1,100 | ) | (1,468 | ) | 635 | (5,941 | ) | |||||
December 31, 2015 | 64,074 | 7,801 | 13,390 | (21,191 | ) | 64,074 |
Natural Gas Liquids (in MBbls) | ||||||||||||||
Vanguard Historical | LRE Historical | Eagle Rock Historical | Pro Forma Adjustments(a) | Vanguard/Pro forma Combined | ||||||||||
Net proved reserves | ||||||||||||||
January 1, 2015 | 42,529 | 4,618 | 13,834 | — | 60,981 | |||||||||
Revisions of previous estimates | (2,151 | ) | (1,473 | ) | 5,116 | — | 1,492 | |||||||
Extensions, discoveries and other | 659 | — | — | — | 659 | |||||||||
Purchases of reserves | 20,836 | — | — | (20,836 | ) | — | ||||||||
Production | (3,489 | ) | (325 | ) | (1,321 | ) | 387 | (4,748 | ) | |||||
December 31, 2015 | 58,384 | 2,820 | 17,629 | (20,449 | ) | 58,384 |
Vanguard Historical(a) | |||
Estimated proved reserves: | |||
Natural Gas (MMcf) | 1,554,186 | ||
Oil (MBbls) | 64,074 | ||
Natural Gas Liquids (MBbls) | 58,384 | ||
MMcfe | 2,288,934 |
Estimated proved developed reserves: | |||
Natural Gas (MMcf) | 1,069,942 | ||
Oil (MBbls) | 54,945 | ||
Natural Gas Liquids (MBbls) | 42,140 | ||
MMcfe | 1,652,452 |
(a) | Includes Vanguard’s, the LRE Merger’s and the Eagle Rock Merger’s estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2015. Vanguard’s Historical estimated net proved and proved developed oil, natural gas and natural gas liquids reserves as of December 31, 2015 include 238,589 MMcfe related to the SCOOP/STACK Divestiture. |
Vanguard Historical(a) | ||||
Future cash inflows | $ | 7,500,445 | ||
Future production costs | (3,105,260 | ) | ||
Future development costs | (664,254 | ) | ||
Future net cash flows | 3,730,931 | |||
10% annual discount for estimated timing of cash flows | (2,008,434 | ) | ||
Standard measure of discounted future cash flows | $ | 1,722,497 |
Vanguard Historical | LRE Historical | Eagle Rock Historical | Pro Forma Adjustments(a) | Vanguard Pro forma Combined(b) | |||||||||||||||
Sales and transfers, net of production costs | $ | (209,997 | ) | $ | (38,639 | ) | $ | (69,831 | ) | $ | 21,141 | $ | (297,326 | ) | |||||
Net changes in prices and production costs | (1,724,757 | ) | (235,874 | ) | (268,172 | ) | — | (2,228,803 | ) | ||||||||||
Extensions discoveries and improved recovery, less related costs | 17,039 | — | — | — | 17,039 | ||||||||||||||
Changes in estimated future development costs | 278,883 | 19,821 | (11,823 | ) | — | 286,881 | |||||||||||||
Previously estimated development costs incurred during the period | 63,624 | 23,112 | 76,252 | — | 162,988 | ||||||||||||||
Revision of previous quantity estimates | (141,045 | ) | (80,444 | ) | 145,458 | — | (76,031 | ) | |||||||||||
Accretion of discount | 297,573 | 44,167 | 59,424 | — | 401,164 | ||||||||||||||
Purchases of reserves in place | 526,245 | — | — | (526,245 | ) | — | |||||||||||||
Sales of reserves | (4,468 | ) | — | — | — | (4,468 | ) | ||||||||||||
Change in production rates, timing and other | (356,327 | ) | (31,962 | ) | (162,296 | ) | — | (550,585 | ) | ||||||||||
Net change in standardized measure | (1,253,230 | ) | (299,819 | ) | (230,988 | ) | (505,104 | ) | (2,289,141 | ) | |||||||||
Standardized measure, January 1, 2015 | 2,975,727 | 441,671 | 594,240 | — | 4,011,638 | ||||||||||||||
Standardized measure, December 31, 2015 | $ | 1,722,497 | $ | 141,852 | $ | 363,252 | $ | (505,104 | ) | $ | 1,722,497 |
(a) | To adjust the amount of purchases of reserves representing the LRE Merger and the Eagle Rock Merger during 2015 included in Vanguard’s historical information. The pro forma effect of each acquisition is presented separately in the table above. |
(b) | The pro forma standardized measure includes Vanguard, the LRE Merger and the Eagle Rock Merger. |
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