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Vanguard Natural Resources, LLC Reports First Quarter 2014 Results

Vanguard Natural Resources, LLC (NASDAQ: VNR) (“Vanguard” or “the Company”) today reported financial and operational results for the quarter ended March 31, 2014.

Mr. Scott W. Smith, President and CEO, commented, “Our quarter was highlighted by our $581 million acquisition in the Pinedale field in Wyoming. With this purchase we now have a position in one of the country's most prolific gas properties with many years of development activity ahead. This transaction is a great platform to initiate our growth capital strategy which will enhance our ability to compete for quality assets in the future.”

   
Three Months Ended
March 31,
2014 2013

($ in thousands, except per unit data)(Unaudited)

Production (MMcfe/d) 268 199
Oil, natural gas and natural gas liquids sales $ 152,740 $ 96,682
Net losses on commodity derivative contracts $ (56,037 ) $ (29,276 )
Operating expenses $ 45,455 $ 33,515
Selling, general and administrative expenses $ 8,038 $ 6,549
Depreciation, depletion, amortization, and accretion $ 43,610 $ 38,693
Net income (loss) attributable to common and Class B unitholders $ 13,159 $ (27,023 )
Adjusted Net Income Attributable to Common and Class B Unitholders (1) $ 24,604 $ 16,889
Adjusted Net Income Attributable to Common and Class B Unitholders, per unit (1) $ 0.31 $ 0.26
Adjusted EBITDA (1) $ 89,863 $ 72,433
Interest expense, including settlements paid on interest rate derivative contracts $ 17,249 $ 16,385
Maintenance capital expenditures $ 28,814 $ 14,648
Distributions to Preferred unitholders $ 1,962 $

-

Distributable Cash Flow Available to Common and Class B Unitholders (1) $ 41,838 $ 41,400
Distributable Cash Flow per common and Class B unit (1) $ 0.52 $ 0.61
Common and Class B units distribution coverage (1)

0.83

x

1.00

x

Weighted average common and Class B units outstanding 79,606 64,789
 

(1) Non-GAAP financial measures. Please see Adjusted Net Income Attributable 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.

 

First Quarter 2014 Highlights:

  • Adjusted EBITDA (a non-GAAP financial measure defined below) increased 24% to $89.9 million in the first three months of 2014 from $72.4 million in the first three months of 2013 and increased 21% from $74.3 million recorded in the fourth quarter of 2013.
  • Distributable Cash Flow Available to Common and Class B Unitholders (a non-GAAP financial measure defined below) for the first quarter of 2014 increased 1% to $41.8 million from the $41.4 million generated in the first quarter of 2013 and decreased 2% from $42.7 million generated in the fourth quarter of 2013.
  • We reported net income attributable to common and Class B unitholders for the first quarter of 2014 of $13.2 million or $0.17 per basic unit compared to a reported net loss of $27.0 million or $(0.42) per basic unit in the first quarter of 2013.
  • Adjusted Net Income Attributable to Common and Class B Unitholders (a non-GAAP financial measure defined below) was $24.6 million for the first three months of 2014, or $0.31 per basic unit, as compared to $16.9 million, or $0.26 per basic unit, in the comparable period of 2013. The 2014 results include net non-cash charges of $11.4 million that are adjustments to arrive at Adjusted Net Income Attributable to Common and Class B Unitholders. Results for the first quarter of 2013 included net non-cash charges of $43.3 million.
  • Reported average production of 268 MMcfe per day in the first three months of 2014, up 35% over 199 MMcfe per day produced in the first three months of 2013. On an Mcfe basis, crude oil, natural gas and NGLs accounted for 19%, 67%, and 14% of our production for the first three months of 2014, respectively.

During the first quarter of 2014, we produced 16,040 MMcf of natural gas, an increase of 34% from the 11,990 MMcf of natural gas produced in the first quarter of 2013, 775 MBbls of oil, an increase of 7% from the 725 MBbls of oil produced in the first quarter of 2013, and 572 MBbls of NGLs, an increase of 123% from the 257 MBbls of NGLs produced in the first quarter of 2013.

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