Vanguard Natural Resources, LLC (NASDAQ: VNR) ("Vanguard" or "the Company") today reported financial and operational results for the quarter ended June 30, 2013.
Mr. Scott W. Smith, President and CEO, commented, "This quarter we reached record levels of production as we continue to see the benefits of our acquisition efforts in 2012 and in the first quarter of 2013. We are excited about the early recompletion results we have seen on the Permian assets recently purchased from Range Resources and our 2013 capital program is on track to generate attractive returns for the Company. With over $850 million of liquidity available, we are well positioned to be very competitive in what we feel will be a very robust acquisition market in the second half of the year."
Mr. Richard A. Robert, EVP and CFO, added, “This was an eventful quarter from a capital markets perspective. Issuing a new publicly traded perpetual preferred unit (NASDAQ: VNRAP) was an important step in creating another source of financing to allow Vanguard to continue to execute its growth through acquisitions strategy. We are also pleased to announce an increase to our common unit distribution effective with our July 2013 distribution which will be paid in September. This reflects a continuation of our slow but steady approach to distribution growth.”
| Three Months Ended
| Six Months Ended
|($ in thousands, except per unit data)|
|Oil, natural gas and natural gas liquids sales||$||116,737||$||66,441||$||213,419||$||149,158|
|Realized gain (loss) on commodity derivative contracts||$||(2,588||)||$||2,165||$||3,184||$||(1,074||)|
|Unrealized gain on commodity derivative contracts||$||61,183||$||83,309||$||26,136||$||60,575|
|Selling, general and administrative expenses||$||6,900||$||4,827||$||13,449||$||9,799|
|Depreciation, depletion, amortization, and accretion||$||42,911||$||20,855||$||81,604||$||42,652|
|Net income available to common unitholders||$||81,149||$||103,447||$||54,126||$||101,423|
|Adjusted net income available to common unitholders (1)||$||19,102||$||8,726||$||35,990||$||30,338|
|Adjusted net income available to common unitholders, per common unit (1)||$||0.27||$||0.17||$||0.53||$||0.58|
|Adjusted EBITDA (1)||$||80,282||$||44,450||$||152,714||$||97,689|
|Interest expense, including realized losses on interest rate derivative contracts||$||16,925||$||10,396||$||33,310||$||16,301|
|Drilling, capital workover and recompletion expenditures||$||14,770||$||15,147||$||29,418||$||23,360|
|Distributions to preferred unitholders||$||152||$||—||$||152||$||—|
|Distributable cash flow available to common unitholders (1)||$||48,435||$||18,907||$||89,834||$||63,405|
|Distributable cash flow available to common unitholders, per common unit (1)||$||0.65||$||0.36||$||1.25||$||1.21|
|Common unit distribution coverage (1)||1.05x||0.61x||1.03x||1.03x|
|Weighted average common units outstanding||71,218||52,031||68,021||52,259|
|(1)||Non-GAAP financial measures. Please see Adjusted Net Income, Adjusted EBITDA and Distributable Cash Flow tables at the end of this press release for a reconciliation of these measures to their nearest comparable GAAP measure.|
Second Quarter 2013 Highlights:
- Adjusted EBITDA (a non-GAAP financial measure defined below) increased 81% to $80.3 million in the second quarter of 2013 from $44.5 million in the second quarter of 2012 and increased 11% from the $72.4 million recorded in the first quarter of 2013.
- Distributable Cash Flow Available to Common Unitholders (a non-GAAP financial measure defined below) increased 156% to $48.4 million from the $18.9 million generated in the second quarter of 2012 and increased 17% from the $41.4 million generated in the first quarter of 2013.
- We reported net income available to common unitholders for the quarter of $81.1 million or $1.14 per basic unit compared to a reported net income of $103.4 million or $1.99 per basic unit in the second quarter of 2012. The recent quarter includes net non-cash gains of $62.2 million that are adjustments to arrive at Adjusted Net Income available to common unitholders (a non-GAAP financial measure defined below). The second quarter of 2012 results included net non-cash gains of $94.7 million.
- Adjusted Net Income available to common unitholders (a non-GAAP financial measure defined below) was $19.1 million in the second quarter of 2013, or $0.27 per basic unit, as compared to $8.7 million, or $0.17 per basic unit, in the second quarter of 2012.
- Reported average production of 36,477 BOE per day in the second quarter of 2013, up 196% over 12,338 BOE per day produced in the second quarter of 2012 and a 10% increase over 33,122 BOE per day produced in the first quarter of 2013. On a BOE basis, crude oil, natural gas and natural gas liquids (“NGLs”) accounted for 24%, 66%, and 10% of our second quarter 2013 production, respectively.