Profile: Vanguard Natural Resources LLC (VNR.O)
7 Mar 2014
Vanguard Natural Resources, LLC (Vanguard), incorporated on October 17, 2006, is focused on the acquisition and development of oil and natural gas properties in the United States. Through the Company’s operating subsidiaries, it owns properties and oil and natural gas reserves located in nine operating areas: 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; South Texas; the Williston Basin in North Dakota and Montana; the Wind River Basin in Wyoming; the Powder River Basin in Wyoming; and Mississippi. On June 1, 2012, the Company entered into a purchase and sale agreement with Antero Resources LLC for the acquisition of natural gas and liquids properties in the Woodford Shale in Oklahoma and Fayetteville Shale in Arkansas of the Arkoma Basin. On December 22, 2011, the Company acquired additional working interest in the certain oil and natural gas properties located in Mississippi. On June 29, 2012, the Company acquired natural gas and liquids assets from Antero Resources. On December 31, 2012, it consummated the previously announced acquisition of natural gas and liquids assets from Bill Barrett Corporation. During 2012, the Company completed other smaller acquisitions of oil and natural gas properties located in Wyoming and North Dakota.
Arkoma Basin Properties
The Company’s Arkoma Basin properties include properties in the Woodford Shale, located in eastern Oklahoma, the Fayetteville Shale, located in Arkansas, and royalty interests and non-operated working interest. During 2012, the Arkoma Basin properties produced approximately 2,196 Thousands of Barrels of Oil Equivalent (MBOE), of which 92% was natural gas. At December 31, 2012, the properties had total proved reserves of approximately 61,866 MBOE or 41% of its total estimated proved reserves at year end, of which 55% were proved developed and 80% were natural gas.
Permian Basin Properties
The Permian Basin is an oil and natural gas producing basins in the United States extending over West Texas and southeast New Mexico. During 2012, its Permian Basin operations produced approximately 1,932 MBOE, of which 59% was oil, condensate and NGLs. These properties accounted for approximately 26,299 MBOE or 17% of its total estimated proved reserves at year end, of which 22,329 MBOE were proved developed and 3,970 MBOE were proved undeveloped. Its average working interest in these properties is approximately 66%. As of December 31, 2012, its Permian Basin properties consisted of 119,264 gross (88,877 net) acres.
Big Horn Basin Properties
The Big Horn Basin is a prolific basin which is characterized by oil and natural gas fields with long production histories and multiple producing formations. Its Big Horn Basin properties are comprised of assets in Wyoming, including the Gooseberry field, and the Elk Basin field in south central Montana. The Company owns working interests ranging from 4% to 100% in its Big Horn Basin properties, which consisted of 39,872 gross (34,704 net) acres as of December 31, 2012. During 2012, its properties in the Big Horn Basin produced approximately 1,452 MBOE, of which 79% was oil. The Big Horn Basin properties accounted for approximately 22,751 MBOE or 15% of its total estimated proved reserves at year end, of which 21,835 MBOE were proved developed and 916 MBOE were proved undeveloped. The Company owns and operates the Wildhorse pipeline system, which is an approximately 12-mile natural gas gathering system that transports approximately 1.0 MMcf/day of low-sulfur natural gas from the South Elk Basin fields to the Elk Basin natural gas processing plant.
Piceance Basin Properties
The Piceance Basin is located in northwestern Colorado. Its Piceance Basin properties are operated by Bill Barrett Corporation and are located in the Gibson Gulch. The Gibson Gulch area is a basin-centered gas play along the north end of the Divide Creek anticline near the eastern limits of the Piceance Basin’s productive Mesaverde (Williams Fork) trend at depths of approximately 7,500 feet. The Piceance Basin properties accounted for approximately 15,662 MBOE or 10% of its total estimated proved reserves at year end, of which 12,692 MBOE were proved developed and 2,970 MBOE were proved undeveloped.
South Texas Properties
South Texas properties are operated by Lewis Petroleum and are located in two fields, Gold River North Field and Sun TSH Field, located in Webb and LaSalle Counties, Texas, respectively. Its working interest ranges from 25% to 100%. Most of the production is high BTU gas that is produced from the Olmos and Escondido sand formations from a depth averaging 7,000 feet. During 2012, the South Texas properties produced approximately 335 MBOE, of which 61% was natural gas. These properties accounted for approximately 6,931 MBOE or 5% of its total estimated proved reserves at year end, of which 4,058 MBOE were proved developed and 2,873 MBOE were proved undeveloped. As of December 31, 2012, its South Texas properties consisted of 21,020 gross (14,267 net) acres.
Williston Basin Properties
Williston Basin properties include: Horse Creek, Charlson Madison Unit, Elk, Cedar Creek MT, Lookout Butte East, Pine, Beaver Creek, Buffalo Wallow, Buford, Crane, Charlie Creek, Dickinson, Elm Coulee, Lone Butte, Lonetree Creek, Missouri Ridge, Tracy Mountain, Tract Mountain Fryburg, Treetop, Trenton and Whiskey Joe. During 2012, the properties produced approximately 404 MBOE, of which 94% was oil. Its Williston Basin properties had estimated proved reserves at December 31, 2012 of 6,165 MBOE or 4% of Its total estimated proved reserves at year end, of which 89% was oil and 5,694 MBOE was proved developed.
Wind River Basin Properties
The Wind River Basin is located in central Wyoming. Its activities are concentrated primarily in the eastern Wind River Basin, along the greater Waltman Arch, where the Company generally serves as operator. Its natural gas production in this basin is gathered through its own gathering systems and delivered to markets through pipelines owned by Kinder Morgan Interstate (KMI) and Colorado Interstate Gas (CIG). At December 31, 2012, the properties had total proved reserves of approximately 5,979 MBOE or 4% of its total estimated proved reserves at year end, all of which were proved developed and 92% of which were natural gas.
Powder River Basin Properties
The Powder River Basin is primarily located in northeastern Wyoming. Its development operations are conducted in its coalbed methane (CBM) fields along with a Powder River Deep Program targeting oil. CBM wells are drilled to 1,200 feet on average, targeting the Big George Coals, typically producing water in a process called dewatering. This process lowers reservoir pressure, allowing the gas to desorb from the coal and flow to the well bore. As the reservoir pressure declines, the wells begin producing methane gas at an increasing rate. As the wells mature, the production peaks, stabilizes and then begins declining. The average life of a CBM well can range from five to 11 years depending on the coal seam. Its natural gas production in this basin is gathered through gathering and pipeline systems owned by Fort Union Gas Gathering, LLC and Thunder Creek Gas Services.
Its Powder River Deep Program consists of vertical and horizontal wells targeting various Cretaceaous oil bearing horizons including the Parkman, Sussex, Shannon, Niobrara, Turner and Frontier formations. The Company also has an interest in an active Parkman waterflood. At December 31, 2012, the properties had total proved reserves of approximately 3,967 MBOE or 3% of its total estimated proved reserves at year end, of which 3,711 MBOE were proved developed and 255 MBOE were proved undeveloped.
Mississippi properties, which the Company operates, are located in the Mississippi Salt Basin. The majority of its production comes from the Parker Creek Field in Jones County, Mississippi, where its working interest is approximately 65%. The Company also has a license for 10 square miles of three dimension (3D) seismic data for the development of Parker Creek Field. Its production is mainly oil that produces from the Hosston Formation from a depth ranging from approximately 13,000 feet to 15,000 feet.
During 2012, the Mississippi properties produced approximately 253 MBOE, of which 94% was oil. These properties accounted for approximately 2,626 MBOE or 2% of its total estimated proved reserves at year end, of which 2,032 MBOE were proved developed and 594 MBOE were proved undeveloped. As of December 31, 2012, its Mississippi properties consisted of 8,280 gross (2,068 net) acres.
Vanguard Natural Resources LLC
Suite 3000, 5847 San Felipe
HOUSTON TX 77057