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Vanguard Natural Resources Reports Third Quarter 2013 Results

Stocks in this article: VNR

Vanguard Natural Resources, LLC (NASDAQ: VNR) ("Vanguard" or "the Company") today reported financial and operational results for the quarter ended September 30, 2013.

Mr. Scott W. Smith, President and CEO, commented, "Our quality asset base continues to deliver solid operational results. We remain active in the acquisitions market and with approximately $900 million of liquidity available, we are well positioned to be competitive for MLP type assets that come to market in the fourth quarter."

Mr. Richard A. Robert, EVP and CFO, added, “We are pleased with where we stand today as a company. Stable cash flows and a strong balance sheet put us in very firm financial footing and bodes well for our continued ability to create long term value for our unitholders. In addition, we remain conservative and prudent with increases to our common unit monthly cash distribution that currently generates an approximate 9.0% yield for our unitholders.”

         
Three Months Ended

September 30,

Nine Months Ended

September 30,

2013 2012 2013   2012

($ in thousands, except per unit data)

(Unaudited)

Production (BOE/d) 35,250 24,367

 

34,957

 

16,786

Oil, natural gas and natural gas liquids sales $ 121,510 $ 78,871 $ 334,929 $ 228,029
Realized gain (loss) on commodity derivative contracts $ (5,359 ) $ 318 $ (2,175 ) $ (756 )
Unrealized gain (loss) on commodity derivative contracts $ (12,355 ) $ (51,332 ) $ 13,781 $ 9,243
Operating expenses $ 36,436 $ 26,567 $ 106,425 $ 75,918
Selling, general and administrative expenses $ 5,730 $ 5,499 $ 19,179 $ 15,298
Depreciation, depletion, amortization, and accretion $ 41,750 $ 31,245 $ 123,354 $ 73,897
Impairment of oil and natural gas properties $

-

$ 18,029 $

-

$ 18,029
Net income (loss) available to common and Class B unitholders $ 1,881 $ (68,727 ) $ 56,007 $ 32,696
Adjusted Net Income Available to Common and Class B Unitholders (1) $ 22,601 $ 17,932 $ 58,591 $ 48,153
Adjusted Net Income Available to Common and Class B Unitholders, per unit (1) $ 0.29 $ 0.34 $ 0.82 $ 0.92
Adjusted EBITDA (1) $ 82,687 $ 66,277 $ 235,401 $ 163,965
Interest expense, including realized losses on interest rate derivative contracts $ 15,819 $ 12,857 $ 49,129 $ 29,158
Drilling, capital workover and recompletion expenditures $ 12,774 $ 16,925 $ 42,192 $ 40,285
Distributions to preferred unitholders $ 1,240 $

-

$ 1,392 $

-

Distributable Cash Flow Available to Common and Class B Unitholders (1) $ 52,854 $ 36,640 $ 142,688 $ 100,044
Distributable Cash Flow per common and Class B unit (1) $ 0.68 $ 0.67 $ 1.93 $ 1.89
Common and Class B units distribution coverage (1)

1.09

x

1.12

x

 

1.05

x

 

1.06

x

Weighted average common and Class B units outstanding 77,903 53,139

 

71,351

 

52,555

 

(1) Non-GAAP financial measures. Please see Adjusted Net Income Available to Common and Class B Unitholders, Adjusted EBITDA and Distributable Cash Flow Available to Common and Class B Unitholders tables at the end of this press release for a reconciliation of these measures to their nearest comparable GAAP measure.

 

Third Quarter 2013 Highlights:

  • Adjusted EBITDA (a non-GAAP financial measure defined below) increased 25% to $82.7 million in the third quarter of 2013 from $66.3 million in the third quarter of 2012 and increased 3% from the $80.3 million recorded in the second quarter of 2013.
  • Distributable Cash Flow Available to Common and Class B Unitholders (a non-GAAP financial measure defined below) increased 44% to $52.9 million from the $36.6 million generated in the third quarter of 2012 and increased 9% from the $48.4 million generated in the second quarter of 2013.
  • We reported net income available to common and Class B unitholders for the quarter of $1.9 million or $0.02 per basic unit compared to a reported net loss of $68.7 million or $(1.29) per basic unit in the third quarter of 2012. The recent quarter includes net non-cash losses of $20.6 million that are adjustments to arrive at Adjusted Net Income Available to Common and Class B Unitholders (a non-GAAP financial measure defined below). The third quarter of 2012 results included net non-cash losses of $86.7 million.
  • Adjusted Net Income Available to Common and Class B Unitholders (a non-GAAP financial measure defined below) was $22.6 million in the third quarter of 2013, or $0.29 per basic unit, as compared to $17.9 million, or $0.34 per basic unit, in the third quarter of 2012.
  • Reported average production of 35,250 BOE per day in the third quarter of 2013, up 45% over 24,367 BOE per day produced in the third quarter of 2012 and a 3% decrease over 36,477 BOE per day produced in the second quarter of 2013. On a BOE basis, crude oil, natural gas and natural gas liquids (“NGLs”) accounted for 24%, 64%, and 12% of our third quarter 2013 production, respectively.

During the quarter, we produced 12,398 MMcf of natural gas, an increase of 50% from the 8,238 MMcf of natural gas produced in the third quarter of 2012, 793 MBbls of oil, an increase of 16% from the 682 MBbls of oil produced in the third quarter of 2012, and 383 MBbls of NGLs, an increase of 105% from the 187 MBbls of NGLs produced in the third quarter of 2012.

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