Vanguard Natural Resources, LLC Announces Closing of Natural Gas and Liquids Properties in the Piceance Basin in Colorado and Increased Borrowing Base
Vanguard Natural Resources, LLC (NASDAQ:VNR) (“Vanguard” or “the Company”) today announced that on September 30, 2014 it consummated the previously announced acquisition of natural gas and liquids assets in the Piceance Basin in Colorado from Bill Barrett Corporation for an adjusted purchase price of $508.7 million, subject to customary final post-closing adjustments. The effective date of the acquisition is July 1, 2014. The debt financing for the acquisition will be included in the Company’s September 30, 2014 balance sheet; however, the beneficial impact of the acquisition will not be reflected in the Company’s results of operations until the fourth quarter of 2014.
Highlights of the acquisition include:
- Immediately accretive to distributable cash flow at closing;
- Estimated reserve life of approximately 16 years based on internally estimated proved reserves of approximately 389 Bcfe (79% proved developed and 77% natural gas);
- Current net production of approximately 67 MMcfe/d (after consideration of ethane rejection);
- An average working interest of 78% in approximately 950 producing wells, 119 recompletion projects and 94 proved undeveloped vertical drilling locations;
- Projected proved developed production three-year average annual decline rate of approximately 11%;
- LOE costs forecasted to average approximately $0.80 per Mcfe over the next three years and production and ad valorem taxes forecasted at 5% of revenue;
- Forecasted natural gas realization of 80% of NYMEX Henry Hub, oil differential of $(12.00) per Bbl off of WTI and an average NGL realization of 47% of WTI (after consideration of ethane rejection); and
- Vanguard has hedged a portion of the natural gas, oil and NGL production through 2017 and intends to continue to opportunistically hedge the remaining expected production for 2015 through 2017.
The Company funded this acquisition with borrowings under its existing reserve-based credit facility. As anticipated, Vanguard’s borrowing base was increased from $1.525 billion to $2.0 billion in connection with a borrowing base redetermination to include the properties from this acquisition and the recently acquired assets in North Louisiana and East Texas. As of September 30, 2014, Vanguard has more than $620 million in liquidity to continue its growth through acquisitions strategy.
About Vanguard Natural Resources, LLC
Vanguard Natural Resources, LLC is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. Vanguard’s assets consist primarily of producing and non-producing oil and natural gas reserves located in the Green River Basin in Wyoming, the Arkoma Basin in Arkansas and Oklahoma, the Permian Basin in West Texas and New Mexico, the Big Horn Basin in Wyoming and Montana, the Piceance Basin in Colorado, the Gulf Coast Basin in Texas, Louisiana and Mississippi, the Williston Basin in North Dakota and Montana, the Wind River Basin in Wyoming and the Powder River Basin in Wyoming. More information on Vanguard can be found at www.vnrllc.com.
We make statements in this news release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These forward-looking statements are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this news release are not guarantees of future performance, and we cannot assure you that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our SEC filings and elsewhere in those filings. All forward-looking statements speak only as of the date of this news release. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.
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